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BUSINESS  MANUAL^ 


SftEVBED  'iSiENLARGED 


LIBRARY   OF 

ALLEN  KNIGHT 

CERTIFIED  PUBLIC  ACCOUNTANT 
502  California  Street 

SAN      FRANCISCO.     CALIFORNIA 


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■SAN  FRANCISCO 


GOODWIN'S 


Improved  Book-Keeping 


BUSINESS  MANUAL 


AUTIluR    OF 


"Goodwin's  Improvkd  Bill  Book,"  and 
'Goodwin's  Practical  Instruction  for  Business  Men. 


'No  man  is  so  wise,  but  may  easily  frr,  if  he  will  lake  no  olher  counsel  but  his  own." — Hen  Jonson. 


^Liocutij-fourtl)  (Ebitiou. 

SEVEN rV-NINTH  rojIIICHtV-lOURTH  T.JOUSAND. 


J.  H.  GOODWIN, 
1215   Broadway,  Nf.w  York  City. 


: \ •'««' York. 


Entered,  according  to  Act  of  Congress,  in  the  year  1881, 
By  J.  H.  Goodwin, 
the  office  of  the  Librarian  of  Congress,  at  Washington.     All  rights  reserved. 

Copyright, 

1S87, 

by 

J.  n.  Goodwin, 

All  rights  reserved. 

& 

Copyright, 


by 
J.  II.  Goodwin, 

All  ri-':ht=:  reserved. 


PREFACE. 


There  is  no  system  of  book-keeping,  however  excellent,  which  cannot,  in  some 
particular,  be  improved — and  there  is  no  man,  however  exalted  in  the  scale  of  intel- 
ligence, who  may  not  acquire  some  knowledge  from  his  fellow-man,  be  the  intellectual 
position  of  the  latter  never  so  lowly  ;  therefore,  let  no  man  think  that  he  is  above 
instruction. 

When  examining  into  the  merits  of  a  new  system,  we  should  remember  that 
"man  always  believes  more  readily  that  which  he  prefers ;"  consequently,  we  should 
strive  to  put  aside  not  only  partiality  for  our  own  system  but  also  prejudice  against 
other  systems,  in  order  the  better  to  judge  of  the  intrinsic  value  of  the  system 
under  consideration.  It  is  the  author's  wish  that  you  may  thus  test  the  merits  of  his 
book. 

The  articles  on  "Book-keeping  of  'A  i'  Houses,"  covered  in  paragraphs  987  to 
im,  were  written,  principally,  from  points  given  to  the  author  by  the  following 
houses — each  house  contributing,  through  its  particular  system,  something  towards 
the  whole:  Arnold,  Constable  &  Co.;  Austin,  Nichols  &  Co.;  Calhoun,  Robbins  & 
Co.;  H.  B.  Claflin  &  Co.;  Robert  K.  Davies  &  Co.;  E.  J.  Denning  &  Co.,  successors 
to  A.  T.  Stewart  &  Co.;  E.  S.  Jaffray  &  Co.;  J.  &  C.  Johnston  ;  Francis  H.  Leggett 
&  Co.;  Lesher,  Whitman  &  Co.;  Lord  &  Taylor;  R.  H.  Macy  &  Co.;  Jamss 
McCreery  &  Co.;  Mills  &  Gibb;  Edward  Ridley  &  Sons  ;  Stern  Brothers;  Sweetser, 
Pembrook  &  Co.;  Tefft,  Weller  &  Co.;  Frederick  Vietor  &  Achelis. 

To  these  great  houses,  therefore,  known  as  all  of  them  are  throughout  the  Union, 
and  as  many  of  them  are  throughout  the  World,  the  author  is  indebted  for  most  of 
the  material  from  which  the  articles  on  "A  1"  houses  were  constructed. 

Pages  58,  72,  and  137  to  278  were  new  in  the  eighth  edition  ;  pages  279  to  the  end 
of  the  book  were  new  in  the  tenth  edition. 

It  has  been  the  author's  aim  to  make  his  articles  clear,  complete,  and  brief. 
Whenever  it  was  not  in  his  power,  however,  to  make  an  article  both  brief  and  clear, 
he  has  sacrificed  brevity  for  the  sake  of  clearness.  A  brief  article  is  of  no  value  un- 
less it  is  understood.  Therefore,  first  in  importance  is  clearness  ;  second,  complete- 
ness ;  and  third,  brevity. 

With  these  few  words  of  introduction  this  work  is  brought  before  the  public,  in 
the  hope  that  it  may  find  a  place  on  the  desk  of  every  book-keeper  and  of  every 
business  man  as  a  book  of  reference. 

THE   AUTHOR. 


380361 


Purchasers'  Privileges. 


EACH  purchaser  is  given  an  ORDER  NUMBER,  which  will  be  found   on   the 
inside    of   the    back    cover    of   his   book.      This   entitles    him  to  the  following 
privileges  : 

GRATUITOUS    ASSISTANCE. 

I.  He  is  entitled  to  gratuitous  assistance  whenever  any  point  of  difficulty 
arises  which  is  not  covered  in  this  book. 

Let  the  value  of  this  privilege  be  noted,  especially  by  those  who  appreciate 
counsel  when  perplexed  by  difficult  problems. 

NEW     POINTS. 

II.  Three  Dollars  will  be  remitted  to  the  purchaser  for  any  point  of  value 
which  he  has  discovered  in  his  own  experience  ;  provided  that  the  point  is  not 
covered  in  this  book,  has  not  been  previously  given  to  the  author,  and  is  not  to  be 
found  in  any  other  book. 

BLANK     BOOKS. 

III.  Five  Per  Cent,  discount  will  be  allowed  to  the  purchaser  upon  the  regular 
price  of  all  Blank  Books  he  may  order. 

If  the  purchaser  finds  that  all  his  valuable  points  are  covered  in  this  book, 
and  that  consequently  he  cannot  secure  the  three  dollars  offered  in  Section  II.,  let 
him  place  his  next  order  for  blank  books  with  the  author,  and  thereby  secure  the 
five  per  cent,  discount  offered  in  Section  III. 

1^"  When  this  book  is  purchased  from  any  person  other  than  from  the  author, 
the  purchaser  is  requested  to  send  at  once  to  the  undersigned  his  name  and  address, 
order  number,  and  the  name  of  the  firm  by  whom  he  is  employed  or  of  which  he  is  a 
member. 

2^^  The  "  outfit  "  which  accompanies  this  book  consists  of  papers  numbered 
A,  B,  C,  D,  !■:,  and  F.  As  all  of  these  papers  are  of  considerable  importance,  the 
undersigned  should  be  notified  when  anyone  of  them  becomes  lost  or  misplaced, 
when  a  new  copy  will  he  sent. 

[J^^  In  all  correspondence  with  the  author,  the  purchaser  must  give  his 
ORDER  NUMBER;  otherwise  he  will  not  be  entitled  to  the  privileges  mentioned 

on  this  ixige. 

J.   H.  Goodwin, 

1315  Broadway,   New  Yorlc. 


INDEX. 


A I  Houses:  Book-keeping  of — 

retail,  1043  to  iiii. 

wholesale,  987  to  1042. 
Abbreviation,  295;/^,  323,  917. 
Ability,  test  of— 

as  book-keeper,  1 190  to  12S5. 

as  clerk,  1068. 
Abstract  — 

Clerks',  1068,  1069. 

Daily  Sales,  1006,  1007,  1066. 

Monthly  Sales,  looS,  1067. 

Sheets,  1012  to  1018. 

Yearly  Sales,  1009. 
Acceptance — 48,  119,  136,  142. 

accepted  by  us,  132,  133,  381. 

accepted  by  others,  114,  115,  3 

discounted,  no. 

endorsed  by  us,  112. 

form,  136. 

interest  on,  1 13 1. 

paid  to  us,  134,  524. 

paid  by  us,  109. 

See  also,  "Notes." 
Account —  5. 


Sales,  242,  245,  249. 
Accounts  payaljle,  33217,  849. 
Addition  — 859. 

Proof  of,  911. 
Additional  investments,  50. 
Addressing  envelopes,  332«,  846,  850. 
Advanced  Double  Entry,  321  to  332,  970  to  98 
Advertising,  194,  526. 

Agent's  accounts  —  see  "Traveling  Expenses. 
Allowances  —  see  "Overcharges." 
Alloy,  888. 
Alphabetical  arrangement  of— 


charge  tickets,  107 1,  1081 
credit  tickets,  1083. 
invoices,  309,  401  to  407. 


Alteration — 

date  on  check,  1 127. 

figures,  847,  1073. 
Alternate  — 

Cash  Books,  1028. 

Register  Books,  1073. 

Sales  Books,  853,  992,  998. 

Sales  Journals,  999  to  1005. 

Ticket  Books,  1047. 
Analysis,  Check,  mo. 
Annual — 

reports  by  Stock  Companies,  1 188. 

statement, — see  "  Yearly  Statement." 
Antiquated  book-keeping,  986. 
Apothecaries'  weights,  876. 
Approval,  goods  sent  on,  983. 
Assessment,  1154. 
Assets  and  Liabilities  —  20,  21. 

closing  of  books,  314,  854,  855. 

new  partner,  316. 

opening  of  books,  311,  312. 

statement  of,  812,  1186. 
Assignment  — 265,  1 130,  1132. 

of  shares,  1 187?. 
Assistant,  846. 
Attorneys  —  262  to  264,  270,  272,  324,  441,  1265. 

collection,  504,  I28l-29th. 

fees,  1283. 
Authorizing  employe  to  sign,  851. 
Author's  audit,  1220. 
Auxiliary  books,  22. 
Averaging  accounts,  889  to  910. 
Avoiding  errors,  26  to  28,  292,  305  to  307,  319,  320, 
833,  848,  858,  953  to  967,  992,   1029,   1056, 
1057,  1059  to  1061,  1070,  1072  to  1075,  1084 
to  IIII,  II16,  II17. 
Avoirdupois  weights,  877,  878. 

Back  Order  Book,  853. 

Balance  Ledger,  11 12  to  11 15. 

Balance  Sheet  — see  "Yearly  Statements." 


I 
J 

L 

M 
N 
O 


Balancing  — 

account,  305  to  308,  321,  913. 

Cash  Book,  857,  858. 

Sales  Ledger,  1019. 
dank  — 

account,  86}^,  3$2c,  852. 

balance,  86|^. 

Balance  Ledger,  1 119. 

book,  86>^,  212. 

clerk,  86^. 

discounts,  320,  489,  495. 

liability,  934,  935,  1127:0  1130,  1 132,  1 133. 

notary,  944. 

notices,  143,  849,  944. 

stockholders,  1181. 

teller,  86>^,  934,  1 1 19. 
Bank  drafts  —  86,  84,  143,  521,  928  to  937. 

endorsement,  830  to  832. 

exchange,  945,  947. 
Bankruptcy,  265,  1130,  1132. 
Baskets,  truck,  1023. 
Bearer,  829,  928  to  932,  968. 
Beginners,  141,  291,  305  10326,  333  to  818,  1 190  to 

1285. 
Beginning  of  business  —  see  "Opening,  etc." 
■Bill  Book,  25,  124,  834,  849,  923,  940  to  942,  1030, 

103 1. 
Bill  clerk,  850,  988,  999,  1014. 
Bills — see  "  Invoices." 

Bills  Payable,  21,  36,  48,  129  to  143,  324,  629  to 
642,  361,  362,  381,  391,  505,  524,  531,  923, 
940,  942. 
Bills  Receivable,  20,  35,  48,  107  to  128,  324,  602 
to  625,  356  to  360,  369,  373,  388,  542,  418, 
422,  467,  4S8,  489,  495,  923,  940,  941,  1030 
to  1033. 
Bills  Receivable  and  Bills  Payable  Book— see  "Bill 

Book." 
Blank  endorsements,  928. 
Blotter,  23. 

Blunders,  848.     See  also,  "  Avoiding  errors." 
Bonds,  U55,  1 156. 
Bonus,  1 161,  1 166  to  1 168. 
Book-keeping,  i,  2,  313,  8,  26,  27,292,  294,  333, 

335,  984  to  986,  1295. 
Books  — 

sizes  of,  883. 

used,  8,  9,  335,  982,  983. 
Branch  Houses,  223  to  240. 
Building,  102  to  106. 
Business  — 

gain,  278,  797,  61,  575;  z8o,  283,  285,  54. 

loss,  279,  282,  60;  280,  284,  285,  53. 

men—  see  "Hints  to  business  men." 
Business  Colleges  — 321  to  326;^,  846,  852,  986. 

Balance  Sheet,  303. 

Cash  account,  75. 


Business  Colleges  —  Continued. 

explanation  columns,  338,  Ex.  602.        * 

ledger-headings,  338,  Ex.  601. 

name  of,  853. 

trial  balance,  302. 
Buyer,  331. 
By,  916. 
By-laws,  819,  1141,  1177. 

v^alendar,  295%. 
Call  — 949,  1 154. 

clerk,  988,  999,  1023. 

loan,  1180. 
Calling  off  amounts,  914. 
Canada  currency,  863. 
Canceled  — 

register-numbers,  1072. 

stock  certificates,  1 157,  11 72. 
Capacity,  measurements  of,  873,  874. 
Capital  —  56,  318,  319. 

Stock  account,  822,  827. 

stock  decreased,  821,  1169  to  1172. 

stock  increased,  821,  1157,  1158. 
Cartage  —  see  "Drayage  " 
Cash  —20,  31,  32,  75  to  S6}4,  977. 

account,  13,  47,  75. 

balance  on  hand,    13,  76,  86^,  34S,  48';,  552, 
554,  857,  858. 

check,  1049,  1050,  1055. 

coupon,  1051. 

credit  slips,  1029,  1084. 

over,  858. 

paid,  44,  77,  79,  506  to  546,  980,  981. 

received,  43,  78,  80,  83,  85,  86,  486  to  505,  833, 
977  to  979- 

sales-tickets,  1049. 

short,  858. 
Cash  Book—  13,  43  to  47,  47'i  to  554,  977  to  981. 

daily  balance,  857,  1124. 

examination  of,  1125. 

explanations,  850,  923,  1205. 

extra  columns,  1 123,  1249. 

footings  carried  forward,  1239. 

General,  1027,  1084. 

Individual,  1026,  1084. 

proof  of  posting,  957  to  960.  963  to  966. 

To  and  By,  916. 
Cash-Check  Book,  1092. 

Cashier,  858,  1026  to  1029,  1049  to  1053,  1059,  '°7>' 
Casting  out  9s,  911  to  913,  965. 
Caution,  127,  128,  319,  320,  831,  832,  833,  84S,  858, 

1106  to  1108,  1125  to  1132. 
Cents- 
column,  338,  Ex.  602  to  610,  918. 

posted  as  dollars,  951. 
Certificate  Book,  1187a. 


Certified  — 

check,   1126,  1 133. 

statement,  338,  Ex.  441. 
Change  — 

book-keepers  around,  1106,  no/. 

books  from  single  entry  to  double  entry,  312, 
315,85410856;^. 

clerk  from  one  department  to  another,  lo6g. 

routes  of  collectors,  1 108. 
Charge  — 

book-keeper,  987. 

checks,  1053,  1059. 

department,   1053  to  1064,  1076  to  1082,  1085, 
1086,  1093. 

tickets,  1053. 
Charges,  in  Commission  business,  249, 250,  253  to  258 
Charter,  819,  1176,  1177,  1188. 
Check  — 86,  86 J^,  928  to  937,  1299. 

against  errors  and  falsification — see  "Avoid- 
ing errors. ' ' 

bearer  canceled,  829. 

certified,  1 126.  1133. 

dated  ahead,  1132. 

drawer,  1127,  1 130,  1 132,  1 133. 

endorsement  on,  830  to  832. 

give,  79,  82,  544. 

on  Retail  Sales  Ledgers,  1085  to  nil. 

receive,  80,  81,  489^4  • 
Check  analysis,  11 10,  nil. 
Check  Book,  86^,  212,  332f,  946,  1296  a. 
Checking  — 

department,  1059  to  1075,  1085  to  1092,  1094 
to  nil. 

invoices,  331. 

pages,  330. 

payments  on  notes,  923. 

postings,  950. 

sales-tickets,  1049. 

settlements,  948,  1029. 

statements,  938. 
Check  Register,  1094  to  noi. 
Check  System,  1045  to  nil. 
Ciphers,  918. 
Circular,  table  of,  8S0. 
City  number,  S50. 
Classification  of  accounts,  843. 
Clearing-house,  11 19. 

Clerk,  1044,  1061,  1064,  1068,  10S3.   See  also  "Sal- 
Clerks'  Abstract  Book,  1068,  1069. 
Clerks'  Sales  Book,  1061,  1064. 
Closing  lines,  801  to  805,  338,  Ex.  674. 
Closing  of  Books  — 

double  entry,  2S7,  17^^,  270,  275  to  295,  919, 
1218. 

single  entry,  854,  855. 

to  take  in  new  partner,  316. 


C.  O.  D.  sales,  938,  1055,  1057,  1062. 

Coinage  of  gold  and  silver,  927. 

Cold  Pig,  983. 

Collateral  security,  1180. 

Collection  and  Exchange,  209  to  212,  523,  525,  533, 

945  to  947. 
Collection  of — 

account  by  agent,  1279. 

account  by  attorney,  262  to  264,  1281-29M. 

note  by  express  company,  832^^. 

time  bills,  128S. 
Collector,  1052,  10S5,  iioS. 
Color — 

books,  983. 

credit  tickets,  1083. 

ink,  325,  1083,  1119. 

sales  tickets,  1055. 
Commission  — 

business,  246  to  261. 

fictitious,   1153,  1163,  1164. 

on  shipments,  241. 

Salesman's  Book,    IO24,  1025. 

to  traveling  agents,  219,  220,  IO24. 
Commilting  Ledger-pages  to  memory,  329. 
Comparative  — 

sales,  1066  to  1069. 

statement,  925,  926. 
Comparison  of — 

advanced  book-keeping  and  antiquated  book- 
keeping, 9S6. 

Sales  Journal  and  Abstract-Sheet  systems,  1015 
to  1018. 

sales  of  one  year  with  tjjose  of  another,  1066, 
1067. 
Confidence  substantiated,  1125. 
Consideration,  nominal,  1166  to  1168,  1174. 
Consignment  —  241  to  261,  1275. 

number  332a',  247  to  249. 
Consignment  Book,  249,  254  to  259. 
Consignor  and  consignee,  249. 

Consolidation  of  different  kinds  of  business,  26l,  839. 
Contingencies,  S25,  1167. 
Contract,  56,  1 149. 
Contra  entry,  847. 

Copartnership,  311,  347yi,  1200,  1250. 
Copper  coin,  887,  888. 
Copying  — 

items  from  invoices,  842. 

letters,  310,  846. 
Corporations — see  "  Stock  Companies." 
Correspondence,  295)^,  846,  1287. 
Cost  — 

marks,  853. 

of  goods,  919,  921,  943. 

of  Ledgers,  1113. 
Counterfeit  bills,  833,  1236. 
Counters,  93,  511. 


I 
J 

L 
M 
N 
O 

o 
p 

R 

S 

s 

T 

U 

V 

W 

Y 


Counting,  table  of,  88l. 
Coupon  — 

bonds,  1 156. 

checks,  1051,  1059,  1071,  1072,  1074. 

Packer's,  1057. 
Credit— 15,  19,  27,  30,  38,  42,  852,  1026  to  103S. 

book-keeper,  1036  to  1038. 

clerk,  1083,  1089. 

department,  1083,  1084. 

man,  1023,  1053,  1055,  11 12. 

slips,  1029. 

standing,  1 1 12,  1 185. 
Credit  Book,  338,  Ex.  427,  976,  1035. 
Credit  Ledger,  853,  975*,  1036. 
Creditors,  851,  245,  323,  828,  843,  853,  928  to  933, 
938,  939,  945,  946,  968,  975,  1036  to  1038, 
1 185. 
Crookedness,  discovery  of,  300,  1 106. 
Cubic  measure,  872. 
Currency,  862  to  866,  884  to  888,  931. 
Customers  — 851,  304,  323. 

accounts  of  328,  843,  853,  987,  1076,  1289. 

address,  850. 

credits,  1125. 

discount,  920  to  922. 

easy,  845. 

new,  332,  1053,  1055,  1082. 

Petty,  327,  736  to  746. 

protest  fees,  835. 

single  entry,  939. 
Customers'  Ledger,  ggo. 
Customhouse  charges,  919. 


Daily  balance  of  accounts.  Ilia,  III9. 

Damaged  goods,  844. 

Day  Book,  12,  23,  1054. 

Days  of  grace,  143,  907. 

Dash,  918,  1203. 

Date  of  invoices,  izo^-^rd. 

Dead  accounts,  S51. 

Dealers'  Ledger,  853. 

Debit,  15,  18,  26,  29,  37,  41,  852. 

Debit  Ledger,  853. 

Debtor,  851. 

Decreased  capital  stock,  1 169  to  1 172,  1188. 

Defalcations  —  see  "Embezzlement,  Fraud,  etc." 

Delivery  department,  1053,  1057. 

Department  — 

Charge,  1053  to  1064,  1076  to  1082,  10S5,  1086, 
1093. 

Checking,  1059  to  1075,  >o8S  '»  '092.  '094  '" 


C.  O.  D.,  1055,  1057,  1062. 
columns,  993,  994,  1003  to  loio. 
Credit,  1083,  1084. 
credits,  1003,  1004. 


Department  —  Continued. 

Delivery,  1053,  1057,  1072,  1073. 

letters,  9S9,  1045. 

M.  O.,  1063. 

sales,  839,  989,  998,  1043. 
Department  Abstract  Sheets,  1012  to  1018. 
Department  Book,  994,  996. 
Department  Ledger,  997,  1065. 
Department  Sales  Book,  1064,  1068. 
Deposit,  &6'/i,  212,  332^,  833,  930,  945,  1 128,  1 129. 
Desks,  93,  514. 

Detecting  errors  in  trial  balance  —  296  to  298,  307, 
841,  951,  952,  I2l8-3r(/. 

new  method  of,  950,  1293. 
Detective,  1 106. 
Diamond  ticket,  1050. 
Diary,  849. 

Different  kinds  of  business  consolidated,  261,  839. 
Dilatory  customers,  845,  441. 
Directors,  1 154,  1188. 
Discount-clerk,  1129. 

Discounting  notes,  122,  153,  834,  S35,  944- 
Discount  off  for  cash  — 

on  goods,   74,  497   and   534,   920  to  922,   943, 
1029,  1214-24M,  1215-26M,  1284. 

on  notes,  152,  153,  146,  4S9  and  509,  154,  I47- 
Dividend  Receipt  Book,  826,  1187a'. 
Dividends  — 823  10826,  1 157,  1 159,  1 1 79. 

fictitious,  1 167,  1 1 75,  ll8S-23ra'. 
Dollars  posted  as  cents,  939,  951. 
Double-Account  Balance  Ledger,  1112  to  1115. 
Double-Account  Retail  Sales  Ledger,   1077  to  1082. 
Double-Account  Reverse  Ledger,  1116,  1117. 
Double  Entry  —  6,  28,  294,  334. 

Advanced,  970  to  986. 
Drafts  —  see  "Acceptance,"  "Bank  Drafts,"  "On- 
demand  Drafts,"  and  "  Sight  Drafts." 
Dr.  and  Cr.,  326. 

Drayage,  190,   T94,  520,  919,  1261-8//;,  12S3,  1284- 
Dr.  to,  915,  382. 
Due  bills,  86. 
Duplicate  — 

sales-tickets,  1056,  1073. 

summary  sheets,  1048. 
Duty,  919. 

Each  side  of  the  Ledger  proved  independently  of 

the  other,  1120. 
Easy  customers,  845. 
Economy  — 

in  Journals,  339,  1018,  1121. 

in  labor,  323,  324,  330,  426,  469,  470,  547,  550, 

970  to  986. 
in  Ledgers,  322,  1077,  1078,  11 12  to  11 17. 
Elimination,  295 >^. 


ing,  etc." 


;,  1125. 
■073- 


Embezzlement,  Fraud,  etc.—  128,  245,  300,    1073, 
1085,   lioi,   1102,   1105    to    nog,  1125,   1166 
to  1168,  1173  to  1175. 
Employes — see  "Salaries." 
Enclosing  bills,  letters,  and  statements,  850. 
Endorsers,  320,  830  to  832,  835,  845,  851,  928  to 

937.  '272. 
Endorsement  on  stock  certificate,  1 187*. 
English  currency,  864,  8S4. 
Entering   invoices,    331,   309,  401    to   407,    458   to 

463.  74- 
Entry  clerks,  973,  988,  993,  999,   1014,   1018,   1023, 

1076. 
Equation  of  payments,  889  to  910. 
Erasures,  847. 
Errors  —  985. 

cash,  858. 

invoices,  844,  1231-17M. 

posting,  847,  848,  1029. 

single  entry,  939. 

trial  balance  —  see  "Dei 

See  also,  "Avoiding  errors." 
Esq.,  850. 
E-x.,  338. 

Exaggerated  assets,  1175,  Ii66tc 
Examination  of— 

Cash  Book  and  Journal  entri 

sales-tickets,  1049,  1059,  107 
Examples  for  practice,  iigoto  1285. 
Exchange  —  see  "Collection  and  Exhange-" 
Executors,  936. 
Expense,   189  to  197,  295.  320,  351,  506,  507,  518, 

839,  1199. 
Experience,  31S,  333. 
Explanation  — 12,  13,  323,  324,  338. 

columns  in  Cash  Book,  474,  481. 

columns  in  Ledger,  556,  560. 

of  Journal  columns,  Ex.  342  to  Ex.  347. 

of  Cash  Book  columns,  Ex.  471  to  Ex.  484. 

of  Ledger  columns,  Ex.  555  to  Ex.  562. 

of  Journal  entries,  Ex.  348  to  Ex.  468. 

of  Cash  Book  entries,  Ex.  486  to  Ex.  546. 

of  Ledger  accounts,  Ex.  563  to  Ex.  800. 
Express  —  see  "Freight  and  Express." 
Extensions— 98S,  993,  1004,  1014,  1025,  1027,  1028, 
1032,  1035,  1037,  1038,  1059,  1061,  1094,  1096. 

measures  of,  867  to  872. 
Extra  columns  —  970,  993  to  nil. 

Cash  Book,  294,  476,  979,  547,  589;  483,  981, 
550,  645  ;  851,  920,  1 123,  1249,  1301. 

Journal,  12,  40'A,  294,  339,  340,  342,  384,  385, 
469,  586;  347,  384,  385,  47°.  590;  839.  851. 
972,  975.. 


of  bank,  945. 

of  customer,  467,  1278-26M. 
Falsification  —  see  "Embezzlement,  Fraud,  etc." 


Farms,  97  to  lOI. 

Fictitious  dividends,  1175,  1167,  Ii88-23rrf. 

Figure  trial-balance,  300  to  302,  808,  809. 

Figure-wizards,  950-10//;. 

Figuring-clerks,  1059. 

Filing  — 

invoices,  309. 

sales-tickets,  1071. 
Filled  pages,  330. 
Fire,  1040. 
Firm  name,  56. 
Fixing  salaries,  106S. 

Fixtures — see  "Store  and  Office  Fixtures." 
Floor  walker,  10S3. 

Fogyism,  75,  321  to  326,  921,  940,  986. 
Folios,  1042,  1079. 

Footings  on  Cash  Book  carried  forward,  1239. 
Foreign  money  —  value  of,  884. 
Forfeit  of  stock,  1 146. 
Forgeries,  932  to  935,  937,  1 127. 
Foundation,  29  to  295. 
Fractional  form  expressing  — 

date,  i205-3>-</. 

discount,  1214-24M. 
Freight  and  Express,  190, '194,  205  to  20S,  515,  393, 

491,  520,  501,  844,  919,  1284. 
French  currency,  865,  884. 
Freshmen,  326. 

Fuel,  189,  194,  198,  199,  200,  529. 
Full  liability  Stock  Companies,  828,  1185. 

Gain,  17,  19,  38,  276,  278,  797,  79S,  575.  582,  283; 

817,818,  1 134. 
General  — 

columns  —  see  "  Miscellaneous  columns." 

Cash  Book,  1026  to  1029,  1084. 

Journal,  102 1,  1032,  1033. 

Ledger,  853. 
Genuineness  of— 

register-numbers,  1073. 

signatures,  937,  1 133. 
German  currency,  866. 
Giving  checks,  931. 
Gold  coin,  885,  888,  927. 
Goods — see  "Merchandise." 
Grace,  143,  907. 
Grind,  848. 
Guaranty,  831,  844,  853,  937,  ^133. 

llandles  to  names,  S50. 

Handling  cash,  858. 

Hand-writing,  23,  850,  973,  1106. 

Hints  to  business  men,  925,  926,  928  to  937,  943  to 

947,  1125  to  1133,  270,  300,  304,  316  10319, 

S29  to  833,  835,  841,  84s,  968. 
Horses,  93. 


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Identification  of — 
endorser,  935. 
goods,  1083. 
Illustration,  333  to  818. 
Implicit  trust,  1 109. 
Improvements,  320,  333. 
Incorporate,  1158,  1188. 
Increased  capital  stock,  1157,  I158,  I188. 
Index  —  320,  327,  332*,  1081,  1300. 
arrangement  of  Ledger,  328. 
cardboard,  329. 
to  transactions,  341. 
Individual  — 

book-keepers,  987. 
Cash  Books,  1026,  1084. 
Infallibility,  848,  1109. 
Inquiries,  1 125. 
Insolvency,  851. 

Installments,  1146,  1 150  to  1154. 
Insurance,  190,  194,  187,  188,  250,  50S,  1040. 
interest— 144  to  154— l^u'e,  ?6i. 

accrued  on  notes,  125,  153,  494,  496,  944 ;  53: 

158,  159,  163. 
allowed  to  us  for  paying  our  notes  before  due, 

147.  J54- 
coupons,  1 1 55. 

method  of  averaging  accounts,  908  to  910. 
Payable,  148,  160,  161. 
rates  in  the  ditTerent  States,  969,  1131. 
Receivable,  149,  155  to  159. 
on  account,  122,  151,  3S2,  905,  1021. 
on  bills  payable  paid,  144,  532. 
on  bills  receivable  discounted,    125,    153,    146, 

509.  512. 
on  bills  receivable  paid,  145,  494. 
on  bills  receivable  renewed,  145,  423,  437. 
on  excess  of  capital,  319,  1134- 
on  payments,  837. 
Inventory  — 72,  195,  196,  287,  289,  806,  807,  1041. 
in  commission  business,  250. 
in  shipping  business,  244,  245. 
Investment,  49,  56,  311,  318,  319,  342  to  369.  $^4, 

569. 
Invoice  Book,  24,  842,  975. 
Invoices  of  goods  bought  — 
copying,  842. 
entering,  309,   331,  401   to  407,   839,   1036  to 

103S. 
filing,  309. 

numbering,  332a',  1039. 
paying,  849,  948. 
posting,  938,  975,  1038. 
receiving  book,  853. 
Itemized  statement,  1076  to  1080. 


J ournal—  12,  39,  40,  40^^. 

-clerks,  1018. 
common  form  of,  1121. 
entries,  348  to  468,  915. 
examination  of  entries,  1 125. 
General,  1021,  1032,  1033. 
Merchandise  Returned,  1035. 
new  form  of,  339,  340,  972,  973,  975^,  342  to  470. 
proof  of  posting,  954  to  956,  963  to  966. 
Purchase,  975*,  1036  to  1038. 
Sales,  1000  to  1005. 
Summary,  1005. 
Transfer,  1020. 
Journalizing — 12,  13,  14,  332,999  to   1005,  1012  to 
1018. 

Labor  —  91.     See  "  Salaries." 

saving,  321   to  3321;',  850,  853,  915  to  918,  920, 
922  to  924,  93S,  940  to  942,  970  to  986,  1017, 
1018,  1038,  1053,  1076  to  1082,  1 1 13. 
Ledger—  15,  41,  42,  294,  295,  321  to  330,  940. 
altering  figures  in,  847. 
Balance,  1 112,  1115. 
Balance  Proof,  953  to  967. 
Bank  Balance,  1119. 
classification  of  accounts,  843. 
common  form  of,  555  to  S05,  1078. 
Credit,  975,}. 

Department,  997,  1038,  1065. 
explanations,  323,  556,  560,  705,  697,  924,  696. 
folios,  1042.  1079. 
Private,  1021. 
Proof,  1102  to  1 105. 
Proof  account.  1 120. 
Purchase,  975/'.  1036. 
Retail  Sales,  1077  to  1082,  1085  to  ini. 
Reverse,  1116,  11 17. 

Sales,  990,  1019,  1053,  1054,  1077,  1 1 12  to  1115. 
Salesman's,  1024. 
saving  of  space,  922,  938. 
Shipping,  242,  243. 
single  entry,  852. 
Stock,  827,  1187^. 

transferring  accounts  to  new  Ledger,  840 
Transposed  Credit  Column.  1118. 
various  rulings  of,  1112  to  ilig- 
Legal  proceedings,  122,  828,  1283. 
Letters,  846,  849,  850,  1029. 
L.  F.,340,  344.  345.  472,  479- 
Liabilities,  17,  19,  21,  37,  38,  49,  292. 
Liability  of — 

bankers,  934,  935.  "27  to  1 130,  1132,  1133. 
stockholders,  828,  nSi  to  1185,  1188. 
Limited -liability   Stock  Companies,   828,    1182  to 
1185. 


Limit  of  capital,  821,  iiSS-iiM. 

Linear  measure,  867,  868. 

Lines  on  sales  tickets  numbered,  1058. 

Liquid  measurement,  873,  874. 

Live  accounts,  85 1. 

Loan —  166,  176. 

call,  II 80. 

to  stockholders,  n88-i8M. 
Loose  sheet  method  of  recording  sales,  S53. 
Loss—  16,  iS,  37,  197,  275,  279  ;  284. 

by  fire,  1040. 
Loss  and  Gain— 1 7K.  >8.  19.  275  10295,  789  to  800. 

single  entry,  314,  854,  855. 

statement  of,  813. 

Stock  Company,  823. 
Lost  Accounts  and  Notes,  265  to  274,  450,  270,  290, 

466,  468,  271,  467,  291 .  324-  784  to  788. 
Lost  sales- tickets,  1056,  1057,  1060,  1070,  1072, 1073. 
Lots,  97  to  loi. 


jVlachinery,  91,  1162. 
Mail-order  department,  1063,  II 12. 
Making  up  cash  balance,  857. 
Manager  of — 

checking  department,  1071. 

salesmen,  1068. 
Manufacturing,  87  to  91. 
Measurements  of  capacity,  873,  874. 
Measures  of  extension,  867  to  872. 
Memoranda,  23,  295)^,  849,  949,  12S6. 
Memorandum  — 

accounts,  852. 

books,  1056. 
Memory,  848. 
Merchandise—  12,  14,  20,  24,  33,  34. 

agents'  sales  of,  215  to  220. 

bought,  67,  386,  401  to  407,  519,  943. 

closing  of  account,  71,  591,  587,  588. 

credit-ticket,  1083,  1089. 

discount  for  cash,  74,  921,  497  and  534. 

freight  on,  207,  919. 

inventory,  66,  yia,  591,  yid,  588. 

Returned  Journal,  1035. 

returned  to  us,  69,  376  to  37S,  976,  1034,  1035, 
1064,  1083. 

sent  to  branch  houses,  223,  224. 

sold,  68,  370,  347,  384,  385,  470,  590;  486,  476, 
547.  589- 

taken  by  proprietor  for  private  use,  59,  395,  410. 

we  return,  70,  379. 
Messrs.,  850. 

Mint  marks  on  gold  and  silver  coins,  927. 
Miscellaneous   columns,   343,   346,  40^4  ;   475,   45, 

482,  46. 
Mislaid  sales-tickets  — see  "  Lost  sales-tickets. " 
Mistakes— see  "Errors." 


M.  O.  D.  sales,  1063. 

Money  — 862  to  866,  884  to  888. 

market,  947. 

orders,  86,  169,  968. 
Monotony,  848. 
Monthly  — 

sales,  1008. 

statements,  841,  846,  850,  938,  1079,  io8o,  1106. 
II 12. 
Mortgages,  loi,  845,  1155. 
Mr.,  850. 
Multiplication,  S60. —  proof  01,  912a. 


Names  for  books,  853,  983. 

Naught  — O,  914. 

Need  of  money,  122,  153. 

Net  proceeds,  242,  245,  249,  253  to  259. 

New  — 

customers,  332,  1053,  1055. 

method  of  delecting  errors  in  trial  balances,  950. 

Sales  Ledgers  each  year,  1019. 
Nominal  capital,  1 166  to  1168 
Notes— 20,  21,  25,  35,  36,  48. 

collection  of,  832  >^. 

discounted,  no,  125,  489,  509,  495,  496,  944. 

endorsed  to  us,  112,  116,  117,  369. 

numbering  of,  923. 

CO  hand,  107,  356  to  360,  602  to  606  ;  128,  320. 

paid  to  us,  109,  4S8,  493,  1031. 

payments  endorsed  on,  123,  127,  834,  923. 

protest  waived,  S35. 

renewed,  124,  421,  422,  425,  435,  436,  1032. 

settlement  of  account  by,  845. 

sold,  III. 

we  endorse,  112,  S32. 

we  give,   130,  131,  381,  142,  397,  505,  940,  942. 

we  owe  at  beginning  of  business,  129,  361,  362, 
633.  634- 

we  pay,  134,  524,  531,  849,  945,  94^'- 

we  receive,   108,   113,  373,  388,   142,  542,  940, 
941,  1030  to  1033. 

we  take  up  at  bank,  126,  530,  532. 

worthless,  271,  426. 
Note-teller  in  bank,  1 129. 
Notices  from  bank,  143,  849,  944. 
Numbering-stamp,  1072,  1073. 
Number  — 

lines  on  sales-tickets,  1058. 
of  books,  982,  9S3. 
Numerical  reference,  332</,  247,  249,  850,  923,  940 
to  942,  948,  1022,  J023,  1039,  1045  to  nil. 


0, 914. 

Object  in  taking  notes,  I2Z. 
Objections  to  single  entry,  939 


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Office- 
boy,  846. 

fixtures,  96. 
Officers  of  Stock  Companies,  11S6,  1 188. 
Old  fogies — see  "Fogyism." 
Omissions,  939,  950-9M. 
On  — 

account,  85.. 

sale,  1275. 
On-demand  draft,  143. 
One— 

per  cent,  method  of  averaging  accounts,  909, 
910. 

side  of  the  Ledger  proved  independently  of  the 
other,  1 120. 
Opening  of — 

double  entry  books,  311,  312,  66,  76,  92,  97, 
102,  107,  129,  164,  174,  49,  173,  1S3,  316, 
318,  347>^  to  369,  1 194  to  1205. 

new  Ledger,  32S,  10S2. 
Order— 

Book,  853,  3321/. 

Pay  to  the  order  of,  92S  to  932. 
Organization  of  Stock  Companies,  819. 
Original  entry,  11  to  14,  970,  982,  1053,  1076. 
Overcharges  — 

in  freight,  393,  206,  491,  502,  S44. 

on  goods,  844,  1083,  1279. 
Overdrafts  —  bank,  332<-. 

Packer,  1053,  1072,  1073,  1087. 
Packer's  coupon,  1057. 
Pads  of  proof  slips,  966. 
Paging  of  books,  1042. 
Paper  — table  of,  882. 
Parcel  clerk,  1049,  105S,  1059. 
Parcels,  1023. 
Partnership  — 

books  changed  to  Stock  Company  books,  1137, 

"39- 

contract,  56. 

liabilities,  1 182. 

new  partner,  316,  317,  159. 

settlement,  159,  854,  1134,  1135. 
Partners'  individual  statements,  814. 
Part-payment  of — 

note.  123,  493.  '27.  §37.  923;  '34.  543- 

subscription  to  stock,  1148. 
Past  due  — 

accounts,  122,  151,  382,  S41,  905,  1112. 

notes,  126,  530,  532,  262  to  264,  441,  304,  12S3. 
Patent  right  purchased  and  paid  for  in  stock,  1160. 
Payments  on  — 

accounts  owing  to  us,  489^^,  497,  499,  323,  948, 
1019,  1026  to  1029. 

accounts  we  owe,  544,  323,  945,  946,  948. 


discounted  notes,  834,  12S1. 

notes — see  "Notes." 

subscription  to  stock,  822,  1148,  1149. 
Paying- teller  in  bank,  1 1 19. 
Pay  to  the  order  of,  92S  to  932. 
Penalty  for  usury,  969. 
Pencil  footings  in  Ledger,  302,  694,  701,  S47,  912, 

967. 
Pension  checks,  86. 
Penmanship —  see  "  Hand-writing." 
Perpetual  proof  of  Ledger  balance,  953  to  967. 
Personal  accounts,  4,  15,  164  to  1S3,  204,  677  to  783, 

851,  852,  924,  939. 
Petty  — 

accounts,  327,  736  to  746,  838. 

Cash  Book,  1125. 

Expense  Book,  1125. 
Phonography,  2()$'/^. 
Plant,  1 163. 
Play  houses,  326. 
P.  O.  Box,  332a. 
Popular  goods,  1068. 
Postage  stamps,  189. 
Postal  notes,  96S. 

Posting— 10,  12  to  14,  24,  294,  325,  328,  329,  332*, 
841,  847,  848,  850,  8$i-sa/i-s,  918,  922,  938, 
939,  940  to  942,  970,  971,  975  to  982,  986,  991 

to  995,  99S,  1000  to  1007,  IOI2  to  1014,  IOI7, 

1018,  1026  to  1039,  1042,  1053,  1054,  1076  to 

I08I,  III6,  III7,  1293,  1296. 

errors  in  —  see  "  Avoiding  errors." 

proof  of,  953  to  966,  1014,  10S5  to  1105,  1292. 
Power  of  attorney,  851. 
Practice  blanks,  11 96. 
Present  of  stock,  1 161. 
Pretty  pictures,  325. 
Price  books,  853. 

Prices  of  goods,  853,  919,  921,  943. 
Principal  books,  9,  12,  13,  14,  15,  23,  24. 
Private  — 

account,  57  to  65,  571  to  583,  S56,  856;^. 

cash  drawn  for  private  use,  57,  510,  513,  541. 

closing  of  Private  account,  64,  286. 

gain,  62,  574,  52.  565- 

Ledger,  1021. 

loss,  63,  583,  51,  567. 

marks  on  checks,  933. 

merchandise  taken  for  private  use,  59,  395,  410. 

Record  Book,  303. 

salary,  58,  204. 

statement,  814. 
Profit  and  Loss  —  see  "Loss  and  Gain." 
Proof- 
account,  1 120. 

against  errors  in  posting,  953  to  967,  992,  1014, 
1085  to  1105,  1292. 


Proof —  Continued. 

against  falsification,  1085  to  1 109 

Ledger,  1102  to  1 105. 

Slips,  966,  1059,  1071,  1084. 

See  also,  "Proving." 
Proportion  of  gain  to  sales,  S17,  81S. 
Proprietors,  49  to  65,  563  to  5S3,  204,  2S6,  303,  814. 
Protest  — 320,  944,  1281-315/. 

waived,  835. 
Proving  — 

addition  and  subtraction,  911  to  913. 

clerks'  sales,  1059  to  1061,  1070,  1072  to  1074. 

each  side  of  the  Ledger  independently  of  the 
other,  1 120. 

ledger-balances,  913,  108c,  1114,  iiig.  1292. 

Ledgers  separately,   992,   995,    1002,    1026   to 
1038,  1085  to  iill,  129S. 

Retail  Sales  Ledgers,  1085  to  Iill. 

sales-tickets,  1070. 
Purchase  — 

Journal,  975;^,  1036  to  1038. 

Ledger,  975(^,  1036. 
Purchases  and  Sales,  11S9. 
Purchases  of  merchandise,  12,  24,  S42,  1065,  1189. 

Raised  checks,  1 133. 

Rates  of  interest  in  the  different  States,  969,  1131. 

Reading  columns  of  figures,  859. 

Real  Estate,  20,  97  to  loi. 

Rebate,  206,  208,  210,  212. 

Receipt — 930. 

for  check  dated  ahead,  1 132. 
Receipting  bills  and  statements,  850,  1132. 
Receiving  Book,  247,  853. 
Receiving-teller  in  bank,  III9,  I129. 
Record  Book,  303,  810  to  81S,  925,  926. 
Red  ink  — 

promises,  305. 

use  of,  321,  322,  325.330- 
Registered  bonds,  1 1 56. 
Register  — 

Book  method,  1073,  1074. 

Check,  1094  to  lioi. 

number,  1023,  1072  to  1074. 

Sheet  method,  1072,  1074. 
Relief-cashiers,  1052. 

Remittances,  928  to  932,  945  to  947,  968,  I02g. 
Renewal  of  note,  124,  421,  422,  425,  435,436,  1032. 
Rent,  190,  194,  506. 
Repairs,  91,  105,  1175. 

Resources—  16,  18,  20,  348  to  360,  368,  369,  37,  38, 
49,  292. 

and  Liabilities  —  see  "Assets  and  Liabilities." 
Retail  Sales  Ledger—  1077  to  1082. 

proof  of,  10S5  to  II II. 
Returns  Book,  1089. 


Reverse  Ledger,  11 16,  11 17. 

Revisionary  additions,  915  to  924. 

Risk  of  stockholders,  1185. 

Rollers,  1023. 

Rule-table  for  averaging  accounts,  910. 

Ruling  Ledger-headings,  322,  601,  628. 

Oafeguard  against  errors  —  see  "  Avoiding  errors." 
Safes,  93,  390. 

Salaries—  190,  194,  201  to  204,  216  to  222,  336,  516, 
522.  337.  535.  537.  539.  453  to  457- 
fixing,  1068. 

of  proprietors,  58,  204,  1250,  1283. 
Sales  — 

Abstract  sheets,  1012  to  1018. 

agents',  215  to  220. 

alternate  books,  853. 

check,  1045. 

C.  O.  D.,  838,  1055,  1057,  1062. 

copying-book  method,  853. 

Department,  989,  1043,  1065,  1068. 

Journal,  1000  to  1005,  1015  to  1018. 

journalized,  332,  337,  408  to  416,  426,  999  to 
1005. 

ladies,  1044. 

Ledger,  990,  1019,  1059,  1077  to  1082. 

loose-sheet  method,  853. 

men,  988,  1023,  1024,  1043  to  nil. 

M.  O.  D.,  1063. 

net,  1223-5//;,  1065,  1189. 

no  Sales  Books  —  itemized  in  Journal,  12,336, 
370,  347.  384.  385.  470.  59°- 

numbered,  3321/,  I022,  1023. 

Register-Book  method,  1073,  1074. 

Register-Sheet  method,  1072,  1074. 

retail  charge,  1076,  1085  to  nil. 

Sheet,  1075. 

statement,  815,  816,  1006  to  ion,  1064,  1066  to 
1068. 

ticket,  1045. 
Sales  Book  —  14,  853,  97 1  to  974. 

Clerks',  1061. 

Commission,  248. 

common  form  of,  n22. 

Department,  991  to  998,  1064. 

entries,  9S8. 

for  each  salesman,  1025. 

posting  proof,  961,  963  to  966,  99I. 

small,  337,  408  to  416,  426. 
Salesman's  Commission  Book,  1024. 
Saving  of  labor — see  "  Labor." 
Scales,  93. 
Scratcher,  246. 
Scratching,  847. 

Security,  loi,  835,  845,  968,  n45,  nS7,  1272. 
Services  of  an  office-boy,  846. 


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&et  of — 

books  and  examples  illustrated  and  explained, 
333  to  8i8. 

examples  for  practice,  1190  to  12S5. 
Settlement  of  accounts,  845,  889  to  gio,  948,  1029. 
Shareholders  —  see  "Stock  Companies." 
Shelves,  93. 
Shipping  — 

Book,  1023. 

business,  241  to  246,  260. 

cards,  1022,  1023. 

clerk,  1023. 

department,  1023. 

number,  1023. 
Shortage,  1 105. 

Short  Calculation,  859  to  861,  909,  9x0. 
Short-hand,  295;-^. 
Sight  drafts  — 86,  85,  143. 

drawn  on  us,  we  pay,  180,  527,  S49. 

endorsement  on,  830. 

we  draw  on  others,  they  pay,  170,  492,  836,  S38. 
Signature  —  928  to  937. 

Book  in  ba.ik,  851. 
Signing  checks,  drafts,  and  notes,  851. 

Single  Entry  — 3,  314,  852,  854  to  856;^,  970,  971, 
975  'o  977- 

objections  to,  939. 
Single  proprietor,  286,  856. 
Soecial  bargains,  1068. 
bpeculation,  1232. 
Spurious  sales-tickets,  1073. 
Square  measure,  870. 
Statement  — 

Comparative,  925,  926. 

itemized,  338,  Ex.  441,  1076  to  1080,  1291. 

of  a-:count,  323,  841,  845,  846,  850,  938,  1079, 
1080,  1 106,  III2,  1291. 

of  condition,  316,  1186,  1188  loM,  ii88-22«£/. 

of  daily  sales,  1006,  1064,  1066,  mo. 

of  monthly  sales,  1008,  1065,  1068,  nil. 

of  yearly  sales,  1009  to  loii. 
Stationery,  189,  507. 
Statistical  Statement,  925,  926. 
Statutory  points  governing  Corporations,  1 188. 
Stock  — 

account,  49  to  56,  563  to  570,  311. 

Books,  1040,  1041. 

certificates,  1157,  1 172. 

clerks,  853,  1023. 

dividend,  1 157,  1159- 

holders —  see  "  Stock  Companies." 

keeper,  853,  1023,  1040,  1041. 

Ledger,  827,  1157,  1187^. 

single  proprietor,  856. 


Stock  Companies  —  819  to  828,  1136  to  1188. 

annual  reports,  11S6,  ii8S-2n</,  11SS-6M,  1188- 

22nd. 
assignment  of  shares,  1187^. 
bank  stockholders,  1181. 
bonds,  1 155,  1 156. 
by  laws,  S19,  I141,  1 177. 
call  loan,  1180. 

canceled  certificates,  1157,  1172. 
Capital  Stock  account,  822,  827. 
•    capital  stock  decreased,  821,  1169101172. 
capital  stock  increased,  821,  1157,  115S. 
charter,  819,  1176,  l'77,  iiSS. 
contingencies,  S25,  1167. 
directors,  1154,  11S8. 
Dividend  Receipt  Book,  826,  IlS7a'. 
dividends,  S23  to  826,  1 157,  H59,  1 179;    1167, 

1 175,  1188-23'!/. 
endorsement  on  stock  certificate,  ii^-ji. 
exaggerated  assets,  I175,  1 166  to  I16S. 
fictitious  dividends,  1 167,  1175,  ii8S-23rfl'. 
forfeit  of  stock,  1146. 
full-liability  Companies,  82S,  1185. 
installments,  1146,  1150  to  1154. 
liability  of  stockholders,  828,  iiSl  to  1 185,  1 188. 
limited-liability  Companies,  828,  1181  to  1185, 

limit  of  capital,  821,  118S-11M. 

loans  to  stockholders,  1 188-1S//;. 

Loss  and  Gain,  823. 

mortgages,  1155. 

nominal  capital,  1166  to  116S,  1174. 

officers,  1 186,  1188. 

organization,  819. 

partnership  books  changed  to  Stock  Company 

books,   1 137,  1139. 
patent  right  purchased  and  paid  for  in  stock, 

1 160. 
payments  on    subscription  to  stock,  822,    1148, 

1 149. 
plant,  1163. 
present  of  stock,  1161. 
statutory  points,  11S8. 
Stock  Certificate  Book,  1187a. 
stock  certificates,  1 157,  1172. 
stock  dividend,  1 157,  1159. 
Stock  Ledger,  S27,  1187^. 
Stock  Subscription  Book,  1147,  11S7. 
Stock  Transfer  Book,  liS7<-. 
surplus  fund,  823  to  S25,  1157. 
surrender  of   stock    certificate,    i\^'l',    1187^, 

iiS7f. 
transfer  of  stock,  820,  S27,   1 170,   11S4,  ii^-jb, 

iiSyc. 
treasury  stock,  1137,  1139.  1141   to  1143.  1157, 

1 160  to  1 162,  1 166  to  m6S,  1 171. 


Stock  Companies  —  Continued. 

trustees,  1141,  1155,  iiS;^,  1188. 

votes  of  stockholders,  821,  1179. 

watered  stock,  1173,  1174,  1166  to  1168. 

working  capital,  1 166. 
Storage,  246,  249,  253,  12S3, 
Store  and  Office  Fixtures,  20,  92  to  96,  511,  514, 

Ex.  518,  390. 
Stoves,  93. 

Student's  work  audited,  1220. 
Sub  cashiers,  1049  '°  1052. 
Subscription  — 

Book,  1 147,  1 187. 

for  stock  —  see  "  Stock  Companies." 
Substitute,  1052,  U29. 
Subtraction  —  proof  of,  912. 
Successor  as  book-keeper,  320. 
Summary  — 

Check  Analysis,  uii. 

Check  Register,  logg  to  lioi. 

Sheet,  1046,  1045,  '°48,  1053,  1061. 
Sundries,  851. 

Sundry  columns—  see  "Miscellaneous  columns." 
Surplus  Fund,  823,  824,  825,  1 157. 
Surrender  of — 

note,  124,  422,  436,  1243. 

stock  certificate,  11871^,  1187^,  1187*. 
Surveyor's  measure,  869,  871. 
Suspense,  274. 

Tables  for  reference,  862  to  888. 
Taking - 

in  a  new  partner,  316,  347%,  367  to  369,  1250 
to  1252. 

set  of  books  from  another  book-keeper,  320. 
Taxes,  184  to  186,  188,  1178,  1284. 
Teams,  93,  i254-2«</. 
Test  of  ability  — 

as  book  keeper,  1190  to  1285. 

as  clerk,  1068. 
Ticket- 
Cash  credit,  1084. 

Merchandise  credit,  1083. 

Sales,  1045. 
Time  — 

drafts,  142,  143.     See  also,  "Acceptances." 

table  of,  879. 
To,  916. 

Transaction,  7,  12,  15,  939,  982. 
Transfer- 
Book,  1187.:. 

Journal,  1020. 

of  stock,  820,  827,  1 179,  1 184,  1187*,  1187*. 

ticket'    1098. 


Transferring  — 

accounts  to  a  new  Ledger,  347>^,  840,  1019. 

an  account  to  a  new  page,  308,  1098. 
Tr.-msposed  Credit  Column  Ledger,  11 18. 
Transposition,  952,  1 125. 

Traveling  agents  —  sec  "Traveling  Expenses." 
Traveling  Expenses,  194,  213  to  222, 1221,  1223-5M, 

1237.  >279- 
Treasury  stock,  1137,  1139,  1141  to  1143,  1157,  1160 

to  1 162,  1 166  to  1 168,  1 171. 
Trial  Balance  — 296  to  307,  316,  320,  330,  848,  III2. 

cash,  13. 

change  bookkeepers  around,  1 107. 

commission,  251,  253. 

errors  in,  841,  950  to  952,  I2i8-3r</. 

hgure,  808,  8og. 

footings,  1 120. 

names,  810,  811. 

proof  against  errors  in,  953  to  967. 
Troy  weights,  875. 
Truck  baskets,  1023. 
Trustees,  936,  1141,  1155,  llS7<',  1188. 

United  States  currency,  862,  885  to  888. 

Units  under  units,  848. 

Unlimited-liability  Stock  Companies,  828,  1185. 

Unnecessary  work,  321  to  326,^^,  986,  1054. 

Use  of  money,  151,  152. 

Usury,  969. 

Value,  862  to  866. 
Variety  of  transactions,  1190,  1285. 
Votes  of  stockholders,  821,  1 1 79. 
Vouchers,  86^,  933,  1156. 

Wages  —  see  "Salaries." 
Wagons,  93. 
Waste  of— 

Journals,  1 121. 

Ledgers,  1078,  11 13. 
Watered  stock,  11 73,  11 74,  1 166  to  1 168. 
Wear  and  tear,  91,  96,  1 175. 
Weights,  875  to  878. 
Wholesale  business,  853,  987  to  1042. 
Withdrawal  of  funds  on  deposit,  1132. 
Working  capital,  1166. 

Worthless  accounts  and  notes,  265  to  274,  290,  784 
to  787,  127826//;. 

Yearly  statement  — 303,  810  to  818,  925,  926. 
of  department  sales,  1009,  loio. 
statistical,  925,  926. 


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SUPPLEMENTARY  INDEX 


Aids  to  the  learning  of  book-keeping,  1295. 

Checks,  filling  out  of  amount,  1299. 
Collection  of  time  bills,  iz88. 
Correspondence.  1287. 
Customers'  accounts,  12S9  to  1291. 

Detection  of  errors  in  posting,  1293. 

Extra  columns  in  Cash  Book,  1301. 

Increase  and  Decrease  statement,  1297. 


Indexing,  1300. 

Memoranda,  1286. 

Posting,  1293,  1296. 
Proving— 

postings  and  Ledger-balances,  1292. 

several  Ledgers  separately,  1298. 


Statement  proof  of 
1291. 


accounts,   1289  tc 


BOOK-KEEPING. 


1.  Book-keeping  is  the  science  of  recording  business  transactions  in  a 
systematic  manner. 

2.  Book-keeping  is  of  two  kinds— Single  Entry  and  Double  Entry. 

3.  In  Single  Entry  we  make  an  entry  only  when  a  personal  account  is 
affected,  at  which  time  we  simply  charge  or  credit  the  person— making  an 
entry  to  only  one  account— hence,  single  entry. 

i.    A  personal  account  is  an  account  with  a  person,  firm  or  corporation. 

5.  An  account  is  a  collection  of  items  under  one  heading  in  the  Ledger. 

6.  In  Double  Entry  we  make  an  entry  for  every  business  transaction,— 
making  an  entry  to  two  or  more  accounts,  according  to  the  number  of  ac- 
counts affected  by  the  transaction.  Every  time  we  debit  an  account  for  a 
certain  amount,  we  credit  some  other  account  for  the  same  amount,— hence, 
double  entry. 

7.  A  business  transaction  is  an  exchange  of  values. 

8.  Books  used. — There  are  two  kinds  of  books  used  in  Book-keeping — 
Principal  and  Auxiliary  or  Aid  Books. 

9.  Principal  Books  are  those  we  post  from  and  use  as  original  books  of 
entry.     The  Ledger  is  also  a  principal  book. 

10.  By  posting  is  meant,  to  transfer  entries  from  any  book  to  the  Ledger. 
The  books  from  which  we  usually  post  are:  Journal  (or  Day  Book),  Cash 
Book,  and  sometimes  Sales  Book  and  Invoice  Book. 

11.  An  original  book  of  entry  is  one  upon  which  the  business  transaction 
is  first  recorded.  The  books  used  principally  as  original  books  of  entry  are: 
Blotter,  Journal  (or  Day  Book),  Cash  Book  and  Sales  Book. 

THE  PRINCIPAL  BOOKS. 

12.  The  Journal. — Business  men  have  abandoned  the  use  of  the  inter- 
mediate book  called  the  Journal,  and  have  consolidated  it  with  the  Day  Book. 
In  the  Business  College  style  of  book-keeping,  merchants  enter  the  business 
transactions  first  in  the  Day-Book  and  then  journali.ze  them  by  arranging  the 
debits  and  credits  on  the  Journal,  after  which  they  post  from  the  Journal 
to  the  Ledger.  The  business  man  of  to-day  can  find  no  use  for  this  unneces- 
sary book,   the  Journal;  it   is  therefore  cast  aside,   and  the  posting  is  done 


DOUBLE   ENTRY   BOOK-KEEPING. 

directly  from  the  Day-Book  to  the  Ledger.  The  Day  Book  is  used  as  a 
detailed  record  of  our  business  transactions.  Having  consolidated  the  two 
books  (Day-Book  and  Journal),  it  is  essential,  in  order  to  have  the  book 
complete,  that  it  should  partake  of  the  style  of  both;  therefore,  when  we 
record  a  business  transaction,  we  first  make  the  Journal  entry,  then  write 
the  explanations  in  as  few  words  as  possible,  either  under  or  on  the  same  line 
with  the  entry.  This  book  may  be  called  either  a  Day  Book  or  a  Journal, 
but  custom  having  made  the  title  "Journal"  preferable,  it  will  be  used  here- 
after instead  of  "Day-Book." 

The  Journal  should  have  two  extra  columns — one  for  "Merchandise  Debit," 
and  one  for  "Merchandise  Credit,"  which  renders  it  unnecessary  to  post  the 
merchandise  oftener  than  once  a  month — crediting  Merchandise  account  in 
the  Ledger  at  the  end  of  the  month  for  the  total  sales  on  account,  as  shown 
by  the  Merchandise  Credit  column,  and  debiting  it  for  the  total  merchandise 
purchases  on  account,  as  shown  by  the  Merchandise  Debit  column.  See 
(342  and  347).  The  left-hand  column  is  the  Debit  and  the  right-hand  column 
the  Credit. 

13.  The  Cash  Book. — The  Cash  Book  is  a  book  used  as  a  detailed  record 
of  all  cash  transactions.  Upon  the  left-hand  or  Debit  side,  is  recorded  all 
cask  received;  and  on  the  right-hand  or  Credit  side,  all  casli  paid  out, — the 
difference  in  the  sums  total  of  the  two  sides  showing,  at  any  time,  the  exact 
amount  of  cash  on  hand.  This  book  should  always  be  used  as  a  book  of 
original  entry;  and  posting  done  directly  therefrom  to  the  Ledger,  as  it  is 
wholly  unnecessary  work  and  a  waste  of  time  to  transfer  the  entries  to  a 
Journal  before  posting.  There  is  no  business  in  which  the  books  can  not  be 
correctly  kept  by  posting  directly  from  the  Cash  Book  to  the  Ledger.  In 
making  entries  in  this  book,  sufficient  explanation  should  accompany  the 
entries  to  make  them  plain.  Of  course,  many  entries  require  no  explana- 
tion; for  instance,  if  a  person  pays  us  on  account,  we  simply  enter  his  name 
and  the  amount  on  the  debit  side  of  the  Cash  Book.  When  notes  are  paid^ 
the  name  of  the  makers,  date,  time,  etc.,  should  be  entered.  All  items  on 
the  Debit  side  of  the  Cash  Book  should  be  credited  to  the  several  accounts 
to  which  they  belong  in  the  Ledger,  because  Cash  is  debited;  and  all  items 
on  the  Credit  side  of  the  Cash  Book  must  be  debited  to  the  several  accounts 
to  which  they  belong  on  the  Ledger,  because  Cash  is  credited.  It  is  unneces- 
sary to  keep  a  Cash  account  in  the  Ledger;  but,  instead,  enter  in  the  trial 
balance,  when  it  is  taken,  the  balance  of  cash  on  hand,  as  shown  by  the  Cash 
Book,  which  result  proves  the  same  as  though  such  an  account  were  kept. 

U.  The  Sales  Book.— The  Sales  Book  is  a  book  in  which  the  merchan- 
dise sales  are  recorded.  It  is  used  principally  in  the  larger  establishments, 
as  in  the  smaller  houses  the  sales  on  account  are  all  recorded  in  the  Journal. 
Posting  is  sometimes  done  directly  from  this  book  to  the  Ledger;  and  some- 
times the  transactions  are  first  transferred  to  the  Journal  before  being  posted. 
In  posting  directly  from  the  Sales  Books  to  the  Ledger,  the  debits  are  posted 
to  the   personal  accounts  therein  charged  daily;  and  the  total  sales  are  car- 


DOUBLE   ENTRY   BOOK-KEEPING. 

ried  forward  until  the  cml  of  the  month,  when  the  Merchandise  account  is 
credited  in  one  entry  from  each  Sales  Book  for  the  total  sales  for  the  month 
in  each  recorded. 

15.  The  Ledger.— The  Ledger  is  a  book  used  to  show  the  final  summing 
up  of  all  our  business  transactions,  and  the  standing  of  all  personal  anil  mis- 
cellaneous accounts.  The  left-hand  side  of  the  Ledger  is  always  the  Debit, 
and  the  right-hand  side  the  Credit 

16.  When  the  Debit  side  of  an  account  in  the  Ledger  is  the  larger,  the 
amount  the  Debit  side  exceeds  the  Credit  is  always  cither  a  Resource  or  a 
Loss. 

17.  When  the  Credit  side  of  an  account  in  the  Ledger  is  the'  larger,  the 
amount  the  Credit  side  exceeds  the  Debit  is  always  either  a  Liability  or  a 
Gain. 

i'>i.The  two  preceding  rules  (16  and  17)  are  of  the  very  greatest  importance 
when  we  close  our  books,  at  the  end  of  the  year,  to  find  how  much  has  been 
lost  or  gained;  for  we  then  begin  with  the  first  account  in  the  Ledger,  and 
carry  all  accounts  upon  which  we  lose  or  gain  to  the  Loss  &  Gain  account; 
therefore,  unless  we  are  mmiliar  with  these  rules,  we  cannot  so  readil}-  decide 
upon  which  accounts  we  lose  or  gain.  The  way  we  decide  upon  which 
accounts  we  lose  or  gain  is  as  follows: 

18.  Debit. — When  we  look  at  an  account  in  the  Ledger,  the  Debit  side  of 
which  is  the  larger,  we  first  decide  whether  or  not  it  is  a  Resource.  If  it  be 
anything-  of  value  belonging  to  us,  or  any  note  or  personal  account  Giving  to  us, 
it  is  a  Resource;  if  not,  it  must  be  a  Loss, — since  all  accounts  on  the  Debit  side 
of  the  Ledger  must  be  either  Resources  or  Lo.s.ses.  If  the  account  be  a 
Resource,  we  pass  it  by  and  do  nothing  with  it;  if  a  Loss,  we  balance  the 
account  and  carry  the  Loss  to  the  Debit  side  of  Loss  &  Gain  account. 

19.  Credit. — On  the  other  hand,  when  we  look  at  an  account  in  the  Led- 
ger, the  Credit  side  of  which  is  the  larger,  we  first  decide  whether  or  not  it  is  a 
Liability.  If  it  be  any  note  or  personal  account  we  owe  it  is  a  Liability;  if 
not,  it  must  be  a  Gain, — since  all  accounts  on  the  Credit  side  of  the  Ledger 
must  be  either  Liabilities  or  Gains.  If  the  account  be  a  Liability,  we  .pass 
it  by  and  do  nothing  with  it;  if  a  Gain,  we  balance  the  account  and  carry 
the  Gain  to  the  Credit  side  of  Loss  &  Gain  account. 

RESOURCES. 

20.  A  Resource  is  anything  of  value  belonging  to  us,  such  as:  Cash,  Mer- 
chandise, Store  Fixtures,  Real  Estate,  Notes  made  by  other  parties  payable 
iu  us  (Hills  Receivable),  etc.,  etc.,  or  any  personal  account  owing  to  us. 

LIABILITIES. 

21.  A  Liability  is  any  unpaid  note  made  by  us  payable  to  other  parties 
Bills  Payable),  or  any  personal  account  we  owe. 


DOUBLE  ENTRY  BOOK  KEEPING. 

THE  AUXILIARY  OR  AID  BOOKS. 

22.  Auxiliary  Books  are  used  to  classify  business  transactions;  they  are 
aiso  used  as  an  aid  to  the  principal  books. 

23.  The  Blotter. — The  Blotter  is  a  book  used  merely  as  a  memorandum 
book.  Many  persons  improperly  call  the  Day  Book  (or  Journal)  a  Blotter. 
Business  men  wishing  only  one  person's  hand-writing  in  the  principal  books, 
keep  a  book  which  they  use  when  this  person  is  absent  from  his  post  of  duty, 
in  which  to  make  a  memorandum  of  the  transactions  that  occur  during  his 
absence,  and  when  he  returns  they  will  be  copied  into  the  proper  books. 

24.  The  Invoice  Book.— The  Invoice  Book  is  a  book  in  which  to  file 
invoices,  or  bills  of  goods  we  buy.  It  may  have  a  single  money  column  at 
the  right  margin  of  the  page,  in  which  to  carry  out  the  amount  of  each  bill 
as  it  is  pasted  in  the  book;  posting  may  be  done  directly  from  this  book  to 
the  Ledger, — each  bill  credited  to  the  account  to  which  it  belongs,  the  total 
of  the  money  column  carried  forward  until  the  end  of  the  month,  and  then 
posted  to  the  Debit  of  the  Merchandise  account  in,  one  entry.  However,  as 
the  book  is  quite  expensive,  and  as  a  great  amount  of  time  is  required  in 
which  to  paste  the  invoices  therein,  the  author  would  recommend  the  system 
suggested  in  paragraph  No.  309. 

25.  The  Bill  Book,  or  Bills  Receivable  and  Bills  Payable  Book, 
is  used  as  a  memorandum  book  for  Notes  and  Time  Drafts  (Acceptances) 
showing  when  they  become  due. 

A  MISTAKE  IN  BOOK-KEEPING  WILL  NEVER  BE  MADE  IF 
THE  FOLLOWING  RULES  ARE  AT  ALL  TIMES  STRICTLY 
ADHERED  TO. 

26.  First. — Debit  what  we  receive.  "Why.'"  Because  what  we  receive 
costs  us  something  of  value. 

2<.  Second. — Credit  what  we  ^/t'^.  "Wh)-.'"  Because  what  we  give  pro- 
duces us  something  of  value. 

28.  Third. — For  every  amount  entered  to  the  Debit  side  of  an  account  or 
accounts  in  the  Ledger,  enter  a  like  amount  to  the  credit  side  of  some  other 
account  or  accounts/"^;'  the  same  amount. 


THE    FOUNDATION 

UPON  WHICH  TO  liUH.D  YOUR  KNOWLEDGE  OF  ]!OOK-KEEPING. 


THE    CORNER    STONE. 

Stone  we  will  have  cut  in  large  letters  the  solitary  i 


In  one  side  of  the  C 
the  other  side  we  wili  nave  cut  our  Coat  of  Arms 
This  we  will  call 

DOUBLE  ENTRY  BOOK-KEEPING 


In  which  will  be  found  " 
'IN  A  NUTSHELL. 


)tto-SYSTEM;  in 
iilullum  ill  farvo." 


29. 


DEBIT  WHAT  WE  RECEIVE. 


31.  If  we  receive  Cash,  debit  Cask. 

33.       "         "        Mcise.,  "      Milse. 

35.       "         "        Note,     "     Bills  Receivable, 

37.  Whenever  we  Debit  an  item,  it  is  always 
either  to  increase  our  Resources  or  our  Losses, 
or  to  decrease  the  personal  accounts  or  notes  we 
owe  (Liabilities). 


30.         CREDIT  WHAT  WE  GIVE. 

32.   If  we  give  Cash,  credit  Cash. 

34.       "        "     Mdse.,    "      Mdse. 

36.       "        "     ^o:.,      "      Bills  Payable. 

38.  Whene.ver  we  Credit  an  item,  it  is  always 
either  to  increase  our  Liabilities  or  our  Gains,  or 
to  decrease  the  personal  accounts  or  notes  owing 
to  us  (Resources). 


Miscella 


The    Journal. 

leous    Debit      I  40.   All   items  in   the    Miscella 


Credit 


column  are  posted  lo  the 

Credit  Side  of  the  Ledger. 


39.  All    items 
column  are  posted  to  the 

Debit  Side  of  the  Ledger. 
■iOM-When  we  have  extra  columns  in  the  Journal,  we  post  only  the  items  found  in  the  Miscellaneous 
Debit  and  Miscellaneous  Credit  columns  during  the  month;  and  at  the  end  of  the  month  we  post  the 
total  amounts  of  the  Mdse.  Dr.  and  Mdse.  Cr.  columns  to  the  Merchandise  account.     (See  par.  12.) 


The    Ledger. 

'er,  we  find      I  42.   On  the  Credi 


41.   On  the  Debit  side  of  the  Ledger, 
nothing  but 

RESOURCES  AND  LOSSES. 
When  we  first  enter  into  business,  and  immediately  after  we  have  closed  the  books  at  the  end  of  the 
year,  there  are  no  open  accounts  in  the  Ledger  except  those  which  are  either  Resources  or  Liabilities. 


f  the  Ledger,  we  find 
nothing  but 

LIABILITIES  AND  GAINS. 


The    Cash    Book. 


43.   Enter  on  the  Debit  side  all 
CASH  RECEIVED. 
45.   All  items  on  the  Debit  side  of  the  Cash 
Book  arc  posted  to  the 

Credit  Side  of  the  Ledger. 
«>4.The  Cash  Book  is  the  Cash  Account,— consequently  the  Cash  Account  is  debited  or  credited  by 
simply  entering  an  amount  on  the  debit  or  credit  side  of  the  C.-ish  Book.  So  when  Cash  is  debited,  all 
the  accounts  on  that  side  of  the  book  must  be  credited;  and  when  cash  is  credited,  all  accounts  on  that 
side  of  the  book  must  be  debited. 


44.   Enter  on  the  Credit  side  all 
CASH  PAID  OUT. 
46.  All  items  on  the  Credit  side  of  the  Cash 
Book  are  posted  to  the 

Debit  Side  of  the  Ledger. 


47.  Bank  Drafts  and  Sight  Drafts  belong  to  the  Cash  Account. 

48.  Nothing  but  Notes  and  Time  Drafts. (or  Accept ajjces)  belong  to  the  Bills 
Receivable  and  Bills  Payable  Accounts. 


THE   FOUNDATION. 

J.  H.  GOODWIN— STOCK   ACCOUNT, 


Closing  No.  i. 
51.  Debit  at  the  end  of  the  year 
for  net  private  loss,  as  shown  by  his 
private  account, 


or 


Closing  No.  2. 
53.  Debit  at  the  end  of  the  year 
for  7iet  business  loss,  as  shown  by  the 
Loss  &  Gain  account;  and    for  loss 
on  "Private  account."       (See  288.) 


49.  Open  a  "Stock  account"  for 
each  member  of  the  firm,  and  credit 
same  at  commencement  of  business 
for  net  amount  by  each  invested,  or 
net  worth,  which  is  found  by  deduct- 
ing the  sum  total  of  his  Liabilities 
from  the  sum  total  of  his  Resources. 
(See  348  to  366;  also  315.) 

50.  Credit  for  all  additional  in- 
vestments. 

Closing  No.  i. 
52.  Credit  at  the  end  of  the  year 
for  net  private  gain,  as  shown  by  his 
private  account, 

or 

Closing  -No.  2. 

54:.  Credit  at  the  end  of  the  year 
for  net  business  gain,  as  shown  by 
the  Loss  &  Gain  account. 


55.  Directions  for  closing  the  Stock  Account  at  the  end  of  the  year: 

a. — According  to  Closing  No-  i. — Bring  over  from  the  respective  Private 
accounts  of  each  member  of  the  firm  the  net  private  loss  or  net  private  gain, 
as  the  case  may  be,  and  debit  or  credit  the  respective  Stock  accounts  for  such 
loss  or  gain.     (See  51  and  52.) 

b.— According  to  Closing  No.  2.— Bring  over  from  the  Loss  &  Gain 
account  the  share  of  the  net  business  loss  or  net  business  gain,  as  the  case  may 
be,  and  debit  or  credit  the  respective  Stock  accounts  for  such  loss  or  gain. 
(See  53  and  54.)  Then  bring  over  from  the  Private  accounts  of  the  respective 
members  the  loss  on  such  accounts,  and  debit  the  respective  Stock  accounts 
for  such  losses.     (See  53.) 

c. — Now  find  the  difference  between  the  two  sides  of  this  account,  and 
write  on  the  debit  side  "To  Balance"  in  red  ink;  entering  this  difference, 
which  will  make  the  account  balance. 

d. — Rule  the  closing  lines  in  red  ink,  and  enter  the  total  amounts  be- 
tween these  lines.      (See  801  to  805.) 

e. — Bring  down  on  the  credit  side  of  this  account,  below  the  closing 
lines,  in  black  ink,  the  difference  as  found  in  "3d"  above,  or  the  present  tuorth 
of  the  partner— writing  the  date,  beginning  the  new  year,  "By  Present- 
Worth,"  and  the  amount. 


THE   FOUNDATION. 

J.  H.  GOODWIN— STOCK  ACCOUNT.— Continued. 

56.  Explanation.— "Stock"  is  a  title  used  to  represent  the  amount  in- 
vested in  the  business.  There  are  several  methods  of  treating  this  account, 
among  which  are  the  following:  ist. — To  call  the  account  "Stock,"  and  credit 
It  for  the  entire  investment  of  the  firm  (regardless  of  how  many  members  the 
firm  may  consist  of),  and  debit  it  or  credit  it  at  the  end  of  the  year  for  the 
entire  net  loss  or  entire  net  gain  of  the  firm,  allowing  the  partnership  con- 
tract to  stipulate  how  much  is  by  each  member  invested,  and  what  proportion 
or  percentage  of  the  gain  or  loss  each  member  is  to  share.  2d. — Some  cal' 
the  account  "Capital,"  while  others  use  the  firm  name  instead:  as,  "J.  H. 
Goodwin  &  Co.,"  treating  it  the  same  as  "Stock,"  described  in  "ist."  3d. — 
The  most  common  and  most  practical  method,  however,  is  to  open  a  sepa- 
rate Stock  account  for  each  member  of  the  firm,  and  credit  each  for  respective 
investment,  as  per  system  shown  in  this  book.  (See  49.)  When  there  is 
but  a  single  proprietor  in  the  business,  he  may  with  propriety  call  the  account 
"Stock,"  and  treat  it  the  same  as  described  in  49. 


66 

to 

64 


J.  H.  GOODWIN— PRIVATE  ACCOUNT. 


57.  Debit  for  all  cash  drawn    for 
private  use. 

59.  Debit  forall  merchandisetaken 
from  the  store  for  private  use. 

58.  Credit  for   salary   allowed,  if 
any. 

61.        Closing  No.  i. 

60.        Closing  No.  i. 

Debit,  at  the  end  of  the  year,  in 
black  ink,  for  his  share  of  the  net 
business  loss,  as  shown  by  the  Loss 
and  Gain  account. 

62.         Closing  No.  2. 

If  the  credit  side  of  this  account 
exceeds  the  debit,  we  find  the  dif-    ' 
ference   between  the  two  sides  and 
debit  this  account,  in  red  ink,  "To 
J.  H.  Goodwin,  Stock  account,"  for 
the  difference,  and  transfer  that  dif- 
ference to  the  credit  side  of  the  J.  H. 
Goodwin    Stock    account,    in    black 
ink.     (See  52.) 

Credit,  at  the  end  of  the  year,  in 
black  ink,  for  his  share  of  the  net 
business  gain,  as  shown  by  the  Loss 
&  Gain  account. 

63.        Closing  No.  2. 

[         If  the  debit  side  of  this  account 
'     exceeds  the  credit,  we  find  the  dif- 
ference between  the  two  sides,  and 
credit  this  account,  in  red  ink,  "By 
J.  H.  Goodwin,  Stock  account,"  for 
the  amount  lost  on  his  private  ac- 
count, and  transfer  that  loss  to  the 
debit   side   of    the   J.    H.    Goodwin 
Stock   account,  in  black  ink.     (See 
SI.) 

64.  Directions  for  closing  the  Private  accounts  at  the  end  of  each  year: 

a  Closing  No.  i.     ist. — According  to  Closing  No.  i,  we  bring  over  from 

the  Loss  &  Gain  account,  at  the  end  of  the  year,  the  ttet  business  loss  or 


THE  FOUNDATION. 

J.  H.  GOODWIN— PRIVATE   ACCOUNT.— Continued. 

net  business  gain,  as    the   case   may  be,   crediting  or    debiting   the    Privait 

account  for  such  gain  or  loss. 

b. — We  then  find  the  diiTerence  between  the  two  sides  of  this  account, 
and  if  the  credit  side  be  the  larger,  write  on  the  debit  side,  in  red  ink,  "To 
J.  H.  Goodwin,  Stock  account,"  and  enter  the  amount  in  the  debit  column. 

c. — Now  rule  the  closing  lines  and  bring  down  the  total  amounts  between 
the  lines. 

d. — Now  carry  this  difference  (the  net  private  gain)  to  the  credit  side  of 
the  "J.  H.  Goodwin  Stock  account,"  in  black  ink.     (See  52  and  55.) 

e. — If,  on  the  other  hand,  we  find  the  debit  side  of  this  account  to  be  the 
larger,  we  write  on  the  credit  side,  in  red  ink,  "By  J.  H.  Goodwin,  Stock 
account,"  and  enter  the  difference  in  the  credit  column:  then  rule  the  closing 
lines  and  carry  the  difference  {iiet private  loss)  to  the  "J.  H.  Goodwin  Stock 
account,"  in  black  ink.     (See  51.) 

/  Closing  No.  2. — According  to  closing  No.  2,  we  do  not  bring  over  from 
the  Loss  &  Gain  account  the  net  business  loss  or  gain  at  the  end  of  the 
year;  but  we  simply  find  the  difference  between  the  two  sides,  and  transfer 
that  difference  to  the  "J.  H.  Goodwin  Stock  account."  We  then  proceed  to 
close  the  account  the  same  as  per  instructions  in  2d,  3d,  4th  and  5th  of  Clos- 
ing No.  I,  above,  except  that  the  phrases  "net  private  gain"  and  "net  private 
loss,"  enclosed  in  parentheses  in  4th  and  Sth,  do  not  apply  here;  for  here  it 
would  be  either  a  loss  on  private  account  or  a  credit  by  private  account. 


65.  Explanation. — We  open  a  Private  account  in  the  Ledger  for  each 
•nember  of  the  firm,  and  treat  it  as  per  instructions  above.  It  is  the  custom 
.)f  some  firms  to  allow  the  respective  members  each  a  salary,  against  which  each 
for  himself  may  draw  for  his  personal  use.  When  this  is  done  theyare  credited 
for  the  salary  monthly  or  yearly,  as  they  prefer;  and  at  the  end  of  the  yeai 
the  account  is  closed  the  same  as  though  no  salary  had  been  allowed,  the 
business  losses  showing  so  much  more  on  account  of  this  Increase  in  the 
"Salaries  account,"  and  the  "Private  account"  of  each  showing  so  much  more 
private  gain;  so  the  business  is  not  in  the  least  affected  by  so  doing. 


MERCHANDISE. 


66.  Debit,  at  commencement  of 
business,  "To  Inventory"  for  amount 
of  Mdse.  on  hand,  as  shown  by  the 
Inventory  or  Account  of  Stock. 

67.  Debit  for  all  Mdse.  we  buy. 
69.    Debit  for  all  Mdse.  returned  to 

us  after  we  have  sold  it. 


68.    Credit  for  all  Mdse.  we  sell. 

70.  Credit  for  all  Mdse.  we  re- 
turn to  other  parties  after  wc  have 
bought  it. 


THE   FOUNDATION. 

MERCHANDISE.— Continued. 

71.    Directions  for  closing  the  Mdse.  account  at  the  end  of  the  year : 

a.^Write  on  credit  side,  "By  Inventory,"  /«  ;W/«/',  for  the  amount  of 
Mdse.  now  on  hand,  as  shown  by  the  inventory. 

^.— Now  find  the  difference  between  the  two  sides  of  "this  account  (In- 
ventory included),  and  the  amount  the  credit  side  exceeds  the  debit  will  be 
the  gaitt  on  Mdse.;  after  wliich,  write  on  the  debit  side  of  this  account,  in 
red  ink,  "To  Loss  &  Gain,"  for  amouat  gained,  which  will  now  make  the 
account  balance. 

c. — Rule  the  closing  lines  and  write  the  total  amounts  between  the  lines. 
d. — Write  on  the  debit  side  of  this  account,  below  the  closing  lines,  in 
black  ink,  "To  Inventory,"  and  bring  down  the  amount  of  Mdse.  now  on  hand 
for  the  beginning  of  the  new  year. 

e. — Carry  amount  gained  on  Mdse.  over  to  the  Loss  &  Gain  account, — 
writing  on  the  credit  side  of  that  account,  in  black  ink,  "By  Mdse.,"  for  the 
amount  gained. 

/"This  concludes  the  closing  of  the  Mdse.  account.     Now  go  back  to  the 
article  "The   End  of  the  Year,"  and  see  what  next  to  do.     (See  289  and  290.) 

73.  ExPL.\N.\TlOX.— The  object  of  crediting  this  account  at  the  end  of 
the  year  "By  Inventory,"  is  simply  to  find  how  much  we  have  gained  on  the 
merchandise  sold  during  the  year;  for,  after  we  have  balanced  the  Mdse. 
account,  we  bring  down  on  the  debit  side  of  this  account  the  amount  of  the 
inventory  for  the  commencement  of  the  new  year.  Consequently,  having 
credited  this  account  "By  Inventory,"  and  debited  it  "To  Inventory"  for  the 
same  amount,  the  balance  of  the  Ledger  is  not  in  the  least  affected;  and  in 
transferring  the  gain  on  merchandise  which  was  found  on  the  credit  side  of 
the  Mdse.  account,  to  the  same  side  (credit)  of  the  "Loss  &  Gain  account," 
the  balance  of  the  Ledger  is  not  in  the  least  affected  in  the  entire  closing  of 
the  Mdse.  account.  We  debit  Mdse.  for  what  it  costs  us,  and  credit  it  for  what 
we  sell  it  for;  hence,  when  we  take  an  account  of  stock  (find  the  value  of  the 
merchandise  we  have  on  hand)  at  the  end  of  the  year,  and  value  it  at  what  it 
would  cost  to  lay  it  in  the  house  at  the  time  the  Inventory  is  taken,  we  add 
the  amount  sold  during  the  year  (credit  side  of  Merchandise  account)  to  this 
amount  on  hand,  and  we  find  the  amount  the  credit  side  exceeds  the  debit 
must  be  the  amount  for  which  we  have  sold  the  merchandise  more  than  it  cost 
us,  or  the  net  gain  on  sales.  For  example:  If  we  buy  lOO  barrels  flour  at  $8 
per  barrel,  we  debit  Merchandise  for  $800.  During  the  year  we  sell  60  barrels 
at  $10  per  barrel,  and  credit  Merchandise  for  $600.  At  the  end  of  the  year 
we  take  an  inventory  or  account  of  stock,  and  find  that  we  have  40  barrels  on 
hand  which  we  must  value  at  what  it  would  cost  if  we  had  to  buy  it  then. 
We  will  suppose  that  the  price  of  flour  had  declined  $I  per  barrel,  and  we 
could  therefore  buy  it  at  $7  per  barrel.  Our  40  barrels  remaining  unsold 
.1  ould    then   be  worth  only  $280.     This  amount  we  add  to  the  amount   sold 


THE  FOUNDATION. 

M  ERCHANDISE.— Continued. 

during  the  year  ($600),  which  makes  a  total  of  $880.  We  now  find  the  amount 
that  this — the  credit  side — exceeds  the  debit,  which  gives  $80,  or  our  tiet  gain 
on  merchandise. 

ILLUSTRATION MERCHANDISE    ACCOUNT. 


Feb'y   20 
Dec'r  31 


Bought  100  brls  flour, 

To  loss  and  gain  (net  gain,) 


$80000 

May    '10 

Dec'r  12 

31 

JSSooo 

Sold  30  brls  flour. 
Inventory  (40  brls,  $7), 


$300  00 
300  00 

280  00 


$SSo  00 


73.  Another  Illustration.— We  debit  Mdse.  at  commencement  of 
business  for  the  value  of  the  merchandise  then  on  hand,  and  we  debit  it  dur- 
ing the  year  for  all  the  merchandise  we  buy;  at  the  end  of  the  year  we  ascer- 
tain how  much  of  this  merchandise  we  have  on  hand,  valuing  it  at  its  present 
worth,  or  what  it  would  cost  to  lay  it  in  the  store  at  this  present  time.  We 
then  find  the  difference  between  the  value  of  the  merchandise  we  now  have 
on  hand,  and  the  total  amount  of  the  debit  side  of  the  Mdse.  account,  which 
will  show  the  present  cost  value  of  goods  sold ;  and  by  referring  to  the  credit 
side  of  the  Mdse.  account,  we  find  how  much  we  have  realized  for  the  goods 
we  have  sold.  We  now  find  the  difference  between  the  value  of  goods  sold 
and  the  amount  for  which  we  sold  them,  and  this  difference  will  be  the  gain  on 
Mdse.  We  then  transfer  that  gain  to  the  "Loss  &  Gain  account,"  close  the 
Mdse.  account  "By  Balance,"  and  bring  down  on  the  debit  side  again,  the 
balance  of  Mdse.  now  on  hand. 

74.  It  is  customary  among  many  business  houses  to  allow  a  discount  for 
cash  on  bills  paid  within  a  certain  time.  If  we  are  allowed  a  discount  for  cash 
on  goods  we  buy,  the  simplest  way  is  to  deduct  the  amount  of  the  discount 
on  the  bills  before  entering  them,  and  pay  these  bills  within  the  time  allowed 
for  discount.  If  we  allow  a  discount  on  our  bills  paid  within  a  certain  time, 
it  is  the  easier  way  to  give  the  parties  credit  in  the  Cash  Book  when  they 
pay,  for  the  full  amount  of  the  bill,  and  debit  Mdse.  (or  Discount)  on  the  oppo- 
site side  of  the  Cash  Book  (credit  side)  for  the  discount  allowed.  (See  497, 
498  and  534.)  Some  houses  keep  a  "Discount  account"  for  these  discounts; 
but  it  is  the  same  in  effect,  and  less  trouble,  to  make  the  entries  to  the  Mdse. 
account.  In  reality,  we  get  so  much  less  for  the  goods  than  we  anticipated 
when  we  sold  them,  consequently  we  have  credited  Mdse.  for  just  the  amount 
of  that  discount  too  much,  and  it  is  now  proper  to  debit  the  Mdse.  account  for 
the  amount  of  that  discount. 


CASH. 

75.  Since  the  Cash  Book  is  the  Cash  account,  this  account  is  never  kept 
in  the  Ledger  by  the  practical  business  man;  but  there  are  a  few  "old  fogies," 
and  more  business  colleges,  who  still  adhere  to  the  antiquated  system.     Tue 


THE   FOUNDATION. 

CASH. — Continued. 

account  is  here  given  in  order  to  show  how  it  was  kept  by  our  forefathers. 
However,  all  these  rules,  forms,  etc.,  may  be  judiciously  used,  by  applying 
them  to  the  debit  and  credit  sides  of  the  Cash  Book,  showing  when  we  enter 
an   amount  on  the  debit  side  of  the  Cash  Book,  and  when  on  the  credit  side. 


76.  Debit,  at  commencement  of 
business,  for  amount  of  cash  on  hand, 
including  the  amount  on  deposit  in 
the  bank;  for  since  it  is  not  necessary 
to  keep  a  bank  account,  this  is  also 
called  cash  on  hand.     (See  86J.) 

78.  Debit  for  all  cash  we  receive. 

80.  Debit  for  all  checks  we  re- 
ceive. 

81.  Form  of  check  we  receive: 


No.  1. 

Chicago,  III 

,  Dec.  4,  1880. 

FIRST  NATIONAL  BANK 

P.->y  ,o 

Good 

win  &  Emerson,  or  order,  One 

hundred  four 

^  Dollars. 

$104. 

G. 

W.  Bennett. 

83.  Debit  for  all   bank  drafts  we 
receive. 

84.  Form  of  bank  draft  we  receive: 


SlOO  ^  STATE   OF   IOWA. 

THE  FIRST  NATIONAL  BANK 
'  OF   GRtNNELL, 

Jan.  3,  1881. 
j      Pay  to  the  order  of  J.  H.  Goodwin  &  Co. 
I  One  hundred  and  -^  Dollars. 

To  Union  National  Bank.  I        C.  H.  SpenCER, 
I  No.  3.  Chicago,  111.  I  Cashier. 


85.  Debit  for  all   sight  drafts  we 
receive. 

Form  of  sight  draft  we  receive: 


51 14™  Detroit,  Mich.,  Jan.  6,  1881. 

At  sight,  with  exchange, 
p.iy  to  the  order  of  J.  H.  Goodwin  &  Co. 
One  hundred  and  fourteen  and  ~  Dollars, 
j  value  received,  and  charge  same  to  ac- 
count of  S.  J.   MlRPHV. 

To  Campbell  &  Co..  Chiogo,  111. 
No.  4. 


77.  Credit  for  all  cash  we  pay  out. 
79.  Credit  for  all  checks  we  give. 
82.  Form  of  check  we  give: 

No.  2.  Chicago,  III.,  Dec.  30,  1880. 

UNION   NATIONAL   BANK 
Pay    to    J.    K.    Armsby   &    Co.,    or    orde; 
Twenty-eight  ^  Dollars. 
$28  -,  Goodwin  &  Emerson. 


THE   FOUNDATION. 

CASH.— Continued. 

86.  Explanation.— Bank  Drafts,  Sight  Drafts,  Checks,  Pension  Checks, 
Money  Orders,  Due  Bills,  and  all  orders  for  which  we  can  get  cash  upon 
presentation,  are  called  Cask;  consequently,  when  we  receive  any  of  these 
we  debit  Cash,  and  when  we  give  any  out  we  credit  Cash.  The  debit  side  of 
the  Cash  account  is  always  the  larger,  as,  of  course,  it  is  impossible  to  pay 
out  more  cash  than  we  receive.      (See  13  and  43  to  46.) 

86  1-2.  Bank  Account.— It  is  unnecessary  labor  to  keep  a  Bank  account 
in  the  Ledger.  It  is  now  the  custom  with  nearly  all  practical  business  men 
to  call  the  amount  on  deposit  in  the  bank  so  much  cash  on  hand,  and  to  keep 
no  account  with  the  bank  in  their  Ledger.  Instead  of  this,  they  keep  their 
account  with  the  bank  on  the  stub  of  the  check-book  in  the  following  man- 
ner: When  they  begin  using  a  check-book  they  enter  on  the  stub  of  the 
book  the  amount  they  have  on  deposit  in  the  bank,  and  when  they  make  a 
deposit  they  add  the  amount  deposited  to  the  amount  they  had  on  deposit; 
then  when  they  draw  checks  on  the  bank  they  deduct  the  amounts  of  such 
checks  from  the  amount  on  deposit.  This  shows,  at  any  time,  the  amount  to 
their  credit  in  the  bank.  Of  course,  besides  a  check-book,  a  bank-book  is 
kept,  in  which  the  deposits  that  are  made  are  entered   by  the  bank  teller. 

The  checks  drawn  on  the  bank  are  usually  entered  in  the  bank  book  once 
a  month,  at  which  time  the  bank-book  is  balanced  by  the  bank-clerk  and 
shows  how  much  is  on  deposit  or  to  our  credit  in  the  bank,  which  amount 
should  just  agree  with  the  amount  on  deposit,  as  shown  by  the  stub  of  our 
check-book,  unless  there  are  checks  out  that  have  not  yet  been  presented  to 
the  bank  for  payment.  When  the  banker  has  "written  up"  our  bank-book  he 
hands  us,  stamped  "Paid,"  all  the  checks  that  we  have'drawn  on  the  bank,  and 
these  he  calls  "vouchers  returned." 


MANUFACTURING. 


87.  Debit,  at    commencement    of    |         88.    Credit    for   all    manufactured 
business,  for  value  of  manufactured     |    goods  we  sel 
goods    on    hand,   as    shown    by  the 
Inventory. 

89.  Debit  for  all  goods  returned 
to  us  after  we  have  sold  them. 

90.    Directions  foi-  closing  the  Manufacturing  account  at  the  end  of  the 
year : 

a.— =Writo  on  the  credit  side  "By  Inventory"  for  the  value  of  the  manu- 
factured goods  we  now  have  on  hand. 

b. — Close   all   the    accounts   we    have  kept   in  the  Ledger   to    show   the 
amounts    consumed    in    the    different    articles   of  manufacture,   and    transfer 


91 


THE   FOUNDATION. 

MANUFACTURING.— Continued. 

amount  lost  on  all  such  accounts  to  the  debit  side  of  this  account,  designating 
the  accounts  upon  which  such  amounts  were  lost.  Also,  close  the  "Labor 
account,"  and  transfer  amount  lost  on  labor  to  the  debit  side  of  this  account. 
c, — Now  proceed  with  the  closing  of  this  account  precisely  the  same  as 
with  the  closing  of  the  Merchandise  account  Par.  71— from  2d  to  5th,  inclu- 
sive— bringing  down  on  the  debit  side  of  the  Manufacturing  account,  after 
it  has  been  closed,  the  value  of  the  manufactured  goods  on  hand  for  the 
beginning  of  the  new  year. 


91.  Explanation. — When  we  manufacture  the  goods  we  sell,  we  call  the 
account  upon  which  we  speculate  "Manufacturing,"  or  "Manufacture,"  instead 
of  "Merchandise."  We  debit  this  account  when  we  commence  business,  if 
we  have  any  manufactured  goods  on  hand,  for  the  then  present  worth  of  those 
goods.  We  debit  this  account  at  the  end  of  the  year  for  what  the  goods 
cost  us  which  we  manufactured  during  the  year.  We  ascertain  what  the  goods 
cost  us  in  the  following-described  way:  We  open  separate  accounts  at 
the  beginning  of  the  year,  for  all  such  articles  as  we  are  going  to  buy  to  use 
in  the  manufacture  of  our  goods;  and  during  the  year,  whenever  we  buy  any- 
thing to  use  in  the  manufacture  of  our  goods,  we  charge  the  articles  to  the 
respective  accounts  to  which  they  belong.  At  the  end  of  the  year,  we  take 
an  inventory  of  each  of  these  articles,  to  ascertain  the  value  of  what  remains 
unused,  after  which,  we  credit  each  of  these  accounts  "By  Inventory,"  in  red 
ink,  for  the  respective  amount  on  hand;  we  then  find  the  difference  between 
the  two  sides  of  each  account,  and  credit  it  "By  Manufacturing,"  in  red  ink. 
for  that  difference — the  difference  being  the  amount  of  that  article  actually 
used  in  the  manufacture  of  the  goods.  We  now  close  the  account  and  bring 
down  on  the  debit  side,  below  the  closing  lines,  the  amount  remaining  unused 
for  the  beginning  of  the  new  year;  after  which  we  carry  over  to  the  debit 
side  of  the  "Manufacturing  account"  the  amount  used  or  lost  on  this  "Article 
account' — all  the  accounts  of  articles  used  in  the  manufacture  of  the  goods 
being  treated  in  the  same  manner.  For  example:  If  we  were  manufacturing 
woolen  goods,  we  would  keep  a  "Wool  account,"  an  "Oil  account,"  a  "Dye 
Stuffs  Account,"  etc.,- etc.  At  the  end  of  the  year  wc  would  ascertain  how 
much  of  each — wool,  oil  and  dye  stuffs— we  had  on  hand  still  unused,  and 
would  close  the  accounts  according  to  the  instructions  above,— carrying 
amounts  lost  on  all  such  accounts  to  the  debit  side  of  "Manufacturing 
account,"  instead  of  to  "Loss  &  Gain."  Wc  keep  a  "Machinery  account," 
ahd  debit  it  for  the  cost  of  all  machinery  we  buy.  During  the  year  wc  charge 
this  account  for  all  repairs  on  the  machinery  for  which  we  have  to  pay,  and  at 
the  end  of  the  year  we  approximate  the  value  of  the  machinery,  allowing 
something  for  the  "wear  and  tear,"  after  which,  wc  close  this  account  the  same 
as  we  do  the  others,  carrying  the  amount  lost  to  the  debit  side  of  the  "Manu- 
facturing account."    Wc  keep  a  "Labor  account,"  in  order  to  show  the  amount 


92 

TO 

95 


THE   FOUNDATION. 

MANUFACTURING.— Continued. 

paid  our  employes  for  making  the  goods,  which  account  we  also  close  and 
carry  to  the  debit  of  "Manufacturing."  The  "Freight  and  Cartage  account" 
may  also  with  propriety  be  closed  and  carried  into  the  "Manufacturing 
account,"  instead  of  to  "Loss  &  Gain."  After  all  of  these  accounts  have  been 
carried  into  the  "Manufacturing  account,"  we  credit  this  account  "By  Inven- 
tory," in  red  ink,"  for  the  presentworth  of  the  manufactured  goods  we  have  on 
hand.  The  books  are  then  closed  precisely  the  same  as  in  any  other  busi- 
ness,—the  amount  gained  on  the  "Manufacturing  account"  being  carried  to 
the  "Loss  &  Gain  account,"  and  all  such  accounts  upon  which  we  have  lost  or 
gained,  and  have  not  carried  to  the  "Manufacturing  account,"  being  also  car- 
ried into  the  "Loss  &  Gain  account." 


STORE  AND   OFFICE   FIXTURES. 


92.  Debit,  at  commencement  of 
business,  for  value  of  store  and  office 
fixtures  on  hand. 

93.  Debit  for  everything  we  buy 
for  fitting  up  the  store  and  office, 
such  as  counters  and  shelves,  scales, 
safes,  stoves,  desks,  etc.,  etc.  Teams 
and  wagons  are  also  often  charged 
to  this  account,  but  it  is  customary 
and  the  most  practical  way  to  open 
a  "Teams  and  Wagons  account." 


94.  Credit  for  anything  we  sell, 
for  which  we  charged  this  account 
when  we  bought  it. 


95,    Directions  for  closing  the  Store  and  Office  Fixtures  account  at  the  end 
of  the  year : 

a, — Write  on  the  credit  side  "By  Inventory,"  in  red  ink,  for  the  value  of 
the  store  and  office  fixtures  on  hand. 

*.— Find  the  difference  between  the  two  sides  of  this  account  (Inventory 
included),  and  the  amount  that  the  debit  side  exceeds  the  credit  will  be  the 
amount  lost  on  store  and  office  fixtures;  after  which,  write  on  the  credit  side 
of  this  account,  in  red  ink,  "By  Loss  &  Gain"  for  amount  lost,  which  will 
now  make  the  account  balance. 

^.— Rule  the  closing  lineh.  and  write  the  total  amount  between  the  lines. 
</._Writc  on   the  debit  side  of  this  account,  below  the  closing  lines,  in 
black  ink,  "To  Inventory,"  and  bring  down  the  value  of  the  store  and  office 
fixtures  now  on  hand,  for  the  Vjeginning  of  the  new  year. 

^.— Carry  amount  lost  on  store  and  office  fixtures  over  to  the  "Loss 
&  Gain  account,"  -writing  on  the  debit  side  of  that  account,  in  black  ink, 
"To  Store  &  Office  Fixtures"  for  the  amount  lost,  which  concludes  the 
closing  of  the  Store  &  Office  Fixtures  account. 


l6 


THE   FOUNDATION. 

srORE    AND    OFFICE    FIXTURES.— Continued. 

96.  E.XPLAN.XTION. — We  take  an  inventory  of  Store  and  Office  Fixtures  at 
the  end  of  the  year  the  same  as  of  Mdse.,  valuing  them  also  at  the  present 
worth,  and  not  at  what  they  cost  us.  After  having  estimated  the  present 
value,  we  close  the  account  according  to  instructions  above  given.  After 
having  credited  the  account  "By  Inventory,"  the  debit  side  will  be  the  larger,' 
and  the  difference  between  the  two  sides  will  be  a  /oss,  as  there  is  always  more 
or  less  "wear  and  tear"  on  the  fixtures  during  the  year;  consequently,  they 
are  constantly  depreciating  in  value.  If  our  fixtures  are  apparently  in  as 
good  order  at  the  end  of  the  year  as  they  were  at  the  beginning,  we  call  them 
worth  the  whole  amount  for  which  the  account  is  charged,  and  allow  it  to 
to  stand  untouched,  calling  it  a  Resource.  Some  houses  call  the  account 
"Store  Fixtures;"  others  call  it  "Office  Fixtures,"  carrying  all  the  store  and 
office  fixtures  into  the  same  account. 


96 

TO 

101 


REAL  ESTATE. 


97.  Debit,  at  commencement  of 
business,  for  value  of  any  Real  Es- 
tate we  own,  as  lots  and  farms. 

98.  Debit  for  all  lots  and  farms  we 
buy. 


99.  Credit  for  all  lots  and  farms 
we  sell. 


100.  Explanation.— We  allow  this  account  to  stand  untouched  from  year 
to  year  and  call  it  a  Resource,  unless  the  property  increases  or  decreases  in 
value;  in  such  a  case  we  close  it  the  same  as  we  do  the  Mdse.  or  Store  Fix- 
tures accounts. 

iOI.  If  wc  arc  in  a  wholesale  business,  we  sometimes  have  customers  who 
become  financially  embarassed  or  "hard  up;"  and  we,  in  order  to  get  good 
security  for  the  payment  of  the  amount  due  us,  take  from  these  customers 
mortgages  on  any  lots  or  farms  which  they  may  own.  If  these  customers 
cannot  pay  when  these  notes  become  due,  we  foreclose  the  mortgages,  when, 
in  some  States,  these  lots  and  farms  come  into  our  possession.  We  can  then 
debit  "Real  Estate"  for  such  lots  and  farms;  or,  open  an  account  for  each  lot  or 
farm,  naming  it  after  the  former  owner,  as:  "Littlefield  Farm,"  "Johnson  Lot,' 
etc..  with  address  or  location.  The  latter  is  recommended  as  the  better 
method.  When  these  accounts  are  opened,  they  are  treated  the  same  as  the 
"Peal  Estate  account." 


102 

TO 

U6 


THE  FOUNDATION. 

BUILDING. 


102.  Debit,  at  commencement  of 
business,  for  value  of  any  buildings 
we  may  own. 

103.  Debit  for  cost  of  any  build- 
ings we  may  build  or  buy. 

105.    Debit  for  all  repairs  we  have 
made  on  the  building.                             | 

104.   Credit  for  any  buildings  we 

may  sell. 

106.    This  account  is  closed   exactly  the   same   as   the   Store  &  Office 
Fixtures  account.     (See  95  and  96.) 


BILLS   RECEIVABLE  (NOTES   RECEIVABLE). 


107.  Debit,  at  commencement  of 
business,  for  all  notes  and  accept- 
ances (time  drafts),  we  have  on  hand, 
made  by  other  parties  payable  to  us. 

108.  Debit  for  all  notes  we  receive 
made  by  other  parties  payable  to  us. 

113.   Form  of  Note  we  receive: 


114.  Debit  for  all  time  drafts  we 
draw  on  other  parties,  payable  to 
ourselves,  which  they  accept. 

115.  Time  Draft — illustration  of 
above: 

Sigon  Chicago,  111.,  Dec.  S,  l88a     '■ 

Ninety  days  after;  date  pgy  to  the  order  of 
ourselves  One  hun4Je<l  JiiniSy  and  "^^  Dollars, 
with  interest  arptejif  ^pcri^ent.  per  annum, 
at  Union  National;  B:y)k,-^hicago.  Value 
received,  and  cbar^  sanie^  account  of 
"^    jSooBwr^  &  Emerson, 

To  Frank  Riohardson,iWilmingwn,  111. 
No.  7. 


109.  Credit  when  those  notes  and 
acceptances  which  we  have  received 
from  other  parties  are  paid. 

110.  Credit  for  all  notes  and  ac- 
ceptances we  get  discounted. 

111.  Credit  for  all  notes  we  sell. 

112.  Credit  for  all  notes  we  en- 
dorse over  to  other  parties  as  a  pay- 
ment on  an  account  or  a  note  we 
owe  them. 


18 


THE   FdUNDATION. 


116 

TO 

120 


116.  Debit  for  all  notes  and  time 
drafts  made  by  one  party,  payable  to 
another,  and  endorsed  over  to  us. 

117.  Note— illustration  of  above: 

%tooo-         Davenpcrt,  Ia.,Nov.i4,i88o. 

Thirty  days  after  date  I  promise  to  pay 
Selden  A.  Eroereon,  or  order.  One  thousand 
and  °^  Dollars,  with  interest  at  8  per  cent, 
per  annum,  at  First  National  Bank  of  Chicago. 

Value  received. 
No.  8.                                    Hugo  Smith. 

Back  of  above  note  endorsed  ove 
to  us: 

r 

Pay  order  of 
Goodwin  &  Emerson. 

118.  Directions  for  balancing  the  Bills  Receivable  account  at  the  end  of 
the  year: 

a. — Find  the  difference  between  the  two  sides  of  this  account,  tlicn  write 
on  the  credit  side  "By  Balance,"  in  red  ink,  for  this  difference,  which  will 
make  the  account  balance. 

h- — Now  rule  the  closing  lines  and  write  the  total  amounts  between  these 
lines. 

c. — Write  on  the  debit  side  of  this  account,  below  the  closing  lines,  in 
black  ink,  "To  Balance,"  and  the  amount  of  the  difference,  as  found  above, 
which  must  exactly  agree  with  the  notes  we  have  on  hand. 

1 19.  Explanation. — Bills  Receivable  account  is  an  account  of  Notes  and 
Time  Drafts  (or  Acceptances)  receivable  to  us,  hence  "Bills  or  Notes  Receiv- 


120.  This  account  is,  in  effect,  in  one  respect  like  the  Cash  Book  or  Cash 
Account;  for,  when  we  receive  a  note,  vtc  debit  Bills  Receivable,  and  when  we 
give  out  that  note,  we  credit  Bills  Receivable.  We  debit  the  account  for  all 
the  notes  and  acceptances  we  receive,  and  credit  it  whenever  we  return  or 
give  out  any  of  those  notes  or  acceptances;  therefore,  the  difference 
between  the  two  sides  of  this  account  should  at  any  time  show  the  e.xact 
amount  of  notes  we  have  on  hand  remaining  unpaid.     The  similarity  of  the 


121 


THE  FOU>fDATION. 

BILLS   RECEIVABLE   (NOTES  RECEIVABLE).— Continued. 
Cash  account  to  the  Bills  Receivable  account  arises  in  this:     We  debit  Cash 
for  the  Cash  we  receive,  and  credit  Cash  whenever  we  give  out  any, — the 
difference  between  the  two  sides  of  the  account  showing,  at  any  time,  the 
exact  amount  of  cash  on  hand. 

121.  The  Bills  Receivable  account  is,  in  another  respect,  like  a  personal 
account  owing  us;  for,  when  a  person  gives  us  a  note,  we  give  that  person 
credit  and  transfer  the  debit  which  heretofore  stood  on  his  account  to  the 
debit  of  Bills  Receivable  account,  which  now  shows  that  the  Bills  Receivable 
account  is  owing  us  instead  of  the  person.  Illustrating  the  account  in  this 
way,  we  will  say  that  this  person  is  responsible  for  "Mr.  Bills  Receivable's" 
indebtedness,  and  is  obliged  to  pay  it  when  it  becomes  due;  so  when  he  pays 
the  note  we  credit  "Mr.  Bills  Receivable,"  and  write  in  the  explanation  column 
the  name  of  the  maker  of  the  note. 

122.  The  three  principal  objects  in  taking  notes  from  our  customers  are: 
1st. — To  have  written  acknowledgments  from  the  parties  of  their  indebted- 
ness, so  that  if  we  were  obliged  to  enter  upon  legal  proceedings  in  order 
to  collect  the  amounts,  we  would  not  have  to  prove  the  indebtedness; 
M'hereas,  if  they  were  open  accounts,  we  would  sometimes  be  obliged  to  do 
so.  2d. — Another  object  is, — if  we  are  in  need  of  money,  we  take  these  notes 
and  discount  them  in  the  bank,  getting  the  money  to  use  in  that  way.  3d. — 
Still  another  is,  in  order  to  get  interest  on  the  accounts;  for  some  persons 
object  to  paying  interest  on  their  accounts  after  they  are  past  due,  but  as  it  is 
customary  to  give  notes  made  with  interest  for  accounts  past  due,  they  do  not 
object  to  paying  it  in  this  way. 

123.  When  the  maker  of  a  note  cannot  pay  its  full  face  when  it  becomes 
due,  but  makes  a  part  payment,  we  credit  "Bills  Receivable"  for  the  amount 
paid,  and  endorse  on  the  back  of  the  note  the  amount  of  the  payment,  in  the 
plainest  possible  manner,  thus:     "January  12,  1881,  paid  $50.00." 

124.  When  the  maker  of  a  note  cannot  pay  when  it  becomes  due,  but 
wishes  to  "renew  the  note,"  the  renewal  may  be  recorded  in  any  one  of  the 
three  following  described  ways:  ist. — By  simply  taking  the  Bill  Book  (see 
25)  and  writing  in  the  "Remarks"  column,  opposite  the  entry  for  the  old  note, 
"Renewed,"  and  then  entering  on  this  same  book  the  new  note  just  received; 
or,  2d. — Bydebiting  the  person  and  crediting  Bills  Receivable  for  the  old  note 
surrendered,  and  then  crediting  the  person  and  debiting  Bills  Receivable  for 
the  new  note  received;  or,  3d. — Bydebiting  Bills  Receivable  for  the  new  note 
received,  and  crediting  Bills  Receivable  for  the  old  note  surrendered.  The 
first  and  second  methods  are  the  most  common  in  use,  and  arc  therefore 
recommended. 

125.  When  we  get  a  note  discounted  in  the  bank,  the  note  is  paid  so  far 
as  we  are  concerned,  so  we  must  credit  "Bills  Receivable"  for  the  full  face  ol 
the  note  on  the  debit  side  of  the  Cash  Book,  and  debit  "Interest"  on  the  oppo- 
site side  of  the  Cash  Book  for  the  amount  of  the  discount.     (See  489  and  509; 


THE   FOUNDATION. 

BILLS  RECEIVABLE  (NOTES  RECEIVABLE).— Continuf.d. 
also  153.)  If,  on  the  other  hand,  the  note  is  drawing  interest,  the  rate  per 
cent,  of  which  is  satisfactory  to  the  bank,  and  some  interest  has  already- 
accrued  at  the  time  we  get  the  note  discounted,  the  bank  then  pays  us  the 
full  face  of  the  note  plus  the  accrued  interest;  we  then  credit  "Bills  Receiva- 
ble" for  the  face  of  the  note,  and  "Interest"  for  the  amount  received  for 
accrued  interest.     (See  495  and  496.) 

126.  If,  after  our  having  a  note  discounted  in  the  bank,  the  maker  should 
fail  to  pay  when  it  becomes  due,  we  are  then  obliged  to  "take  up  the  note," 
i.  e.,  give  the  bank  a  check  or  the  money  for  the  face  of  the  note  and  the 
interest  accrued  to  date,  when  the  note  again  becomes  our  property;  there- 
fore, we  debit  "Bills  Receivable  /^ccount"  for  the  face  of  the  note,  and 
"Interest  Account"  for  the  accrued  interest.  This  note  being  now  called  a 
"past-due  note." 

127.  When  a  "note  is  received,  which  was  made  by  one  party  payable  to 
another  and  endorsed  over  to  us,  care  should  be  taken  to  see  whether  there 
are  any  payments  endorsed  on  the  note;  for,  of  course,  a  note  is  worth  only 
its  face  less  the  payments,  if  any  have  been  made. 

128.  As  the  difference  between  the  two  sides  of  the  Bills  Receivable 
account  should  at  any  and  all  times  exactly  agree  with  the  total  value  of  the 
notes  we  have  on  hand,  the  book-keeper  should  take  the  notes  as  often  as 
once  a  month,  put  down  the  value  of  each  on  a  piece  of  paper,  and  afterward 
find  the  total  of  these  amounts  to  see  whether  it  agrees  with  the  amount 
required  by  the  Bills  Receivable  account.  As  much  responsibility  rests  upon 
the  book-keeper  in  having  the  notes  on  hand  agree  with  the  Bills  Receivable 
account,  as  does  in  having  the  cash  on  hand  agree  with  the  Cash  Book;  for, 
if  the  notes  on  hand  do  not  agree  with  the  Bills  Receivable  account,  it  shows 
"there  is  a  nut  loose  somewhere."  When  we  post  an  amount  to  the  Bills 
Receivable  account,  we  write  in  the  explanation  column  the  name  of  the 
maker  of  the  note;  the  date  and  the  time  may  also  be  added  in  the  explana- 
tion, so  that  if  there  be  a  mistake  on  the  account  we  may  check  off  from  the 
credit  side  to  the  debit  the  notes  that  have  been  paid,  and  in  this  way  ascer- 
tain where  the  mistake  is. 


126 

128 


139 

TO 

135 


THE   FOUNDATION. 


BILLS   PAYABLE   (NOTES    PAYABLE). 


134.  Debit  when  we  pay  the  notes 

and  time  drafts  we  owe. 


129.  Credit,  at  commencement  of 

business,  for  all  notes  and  time  drafts 
we  owe. 

130.  Credit  for  all  notes  we  give 
to  other  parties,  made  by  us  payable 
to  them. 

131.  Note  we  give — illustration  of 
above: 

j  $189  -°  Chicago,  111.,  Dec.  8,  1880. 

Sixty  days  after  date  we  promise  to  pay  to 
!  the  order  of  Procter  &  Gamble,  One  hundred 
j  eighty-nine   and  ^°^  Dollars,  at  Second  Na- 
tional Bank  of  Chicago.     Value  received. 
No.  9.  Goodwin  &  Emerson. 


132.  Credit  for  all  time  drafts 
drawn  on  us  by  other  parties  we 
accept. 

133.  Time  Draft— illustration  of 
above: 


135.    Directions  for  balancing-  the  Bills  Payable  accotint  at  the  end  of  the 
year: 

(7.— Find  the  difference  between  the  two  sides  of  this  account,  and  then 
write  on  the  debit  side,  in  red  ink,  'To  Balance"  for  that  difference,  which 
will  make  the  account  balance. 

^.  — Now  rule  the  closing  lines  and  bring  ilown  the  total  amounts  between 
the  lines. 

c. —Write  on  the  credit  side,  below  the  closinj;  lines,  '•By  Balance,"  in 
black  ink,  for  the  difference  above  found,  which  difference  should  exactly 
agree  with  the  notes  and  acceptances  we  owe. 


Till-    FOUNDATION. 

BILLS   PAYABLE    (NOTES   PAYABLE^  — CoxTiNUEn. 

136.  Explanation. — Bills  Payable  account  is  an  account  of  Notes  and 
Acceptances  given  by  us,  and  consequently  payable  by  us;  hence,  Bills  {or 
Notes)  Payable.  We  credit  Bills  Payable  when  we  give  a  note  or  accept  a 
time-draft;  and  when  we  pay  that  note  or  draft  we  debit  Bills  Payable. 

137.  This  account  is,  in  effect,  like  a  personal  account  we  owe;  for,  when 
we  give  a  person  a  note,  or  accept  a  time-draft  which  he  draws  on  us,  wc 
debit  this  person's  account,  and  transfer  the  credit  which  heretofore  existed 
on  same  to  the  credit  of  Bills  Payable  account;  so  that,  illustrating  the 
account  in  this  manner,  we  are  now  owing  "Mr.  Bills  Payable"  instead  of  this 
person.  Now  when  the  amount  becomes  due,  this  "Mr.  Bills  Payable"  "comes 
to  us  in  such  a  questionable  shape,"  being  in  the  form  of  a  fiote.  that  we 
must  pay  him.  We  then  debit  "Mr.  Bills  Payable"  in  order  to  show  that  the 
debt  exists  no  longer,  in  so  far  as  that  one  amount  is  concerned. 

138.  The  difference  between  the  two  sides  of  this  account  should  at  any 
time  exactly  agree  with  the  notes  and  acceptances  we  have  outstanding, 
or  the  notes  we  have  given  and  the  time-drafts  we  have  accepted  which  still 
remain  unpaid. 

139.  When  we  make  an  entry  on  the  Bills  Payable  account  we  always 
write  in  the  explanation  column  the  name  of  the  person  to  whom  we  gave 
the  note;  the  date  of  the  note  and  time  may  also  be  added,  so  that  if  there  be 
a  mistake  in  this  account,  i.  e.,  if  at  any  time  the  amount  of  our  notes  out- 
standing does  not  agree  with  the  difference  between  the  two  sides  of  this 
account,  we  may  then  check  from  the  debit  side  to  the  credit  the  notes  that 
have  been  paid,  and  in  this  way  find  the  mistake. 

140.  The  reason  we  give  notes  and  accept  time-drafts  is,  because  the 
parties  from  whom  we  buy  request  us  to  do  so,  with  the  same  objects  in  view 
which  we  have  when  we  take  notes  from  our  customers.     (See  122.) 


BILLS  RECEIVABLE  AND  BILLS  PAYABLE  ACCOUNTS. 

141.  Beginners  in  the  study  of  book-keeping  sometimes  get  these  two 
accounts  confused,  but  all  doubts  may  at  such  times  be  easily  and  quickly 
dispelled  by  soliloquizing  in  the  following  way:  "Will  the  money  be  receivable 
to,  or  payable  by  us  when  this  note  is  due.'  If  receivable  to  us.  Bills  Receivable 
account  is  affected,  and  we  must  make  the  entry  to  the  Bills  Receivable 
account;  '\{ payable  by  us.  Bills  Payable  account  is  affected,  and  we  must  make 
the  entry  to  the  Bills  Payable  account." 

142.  Accepting  a  time-draft  which  a  person  draws  upon  us,  is  exactly  the 
same  in  effect  as  giving  that  person  a  note;  for,  by  so  doing,  we  promise  to  pay 
him  at  the  expiration  of  a  certain  period  of  time,  with  or  without  interest,  for 
value  received,  a  certain  amount,— which  is  neither  more  nor  less  than  we  do 
when  we  give  a  note.  When  a  person  accepts  and  returns  to  us  a  time-draft 
which  we  made  on  him,  it  is,  of  course,  the  same  in  effect  as  though  we  received 


136 

142 


143 


THE   FOUNDATION. 

BILLS  RFXEIVABLE  AND  BILLS  PAYABLE  ACCOUNTS.— Continued. 
a  note  from  him.  Time-Draft  and  Acceptance  are  but  different  names  for 
the  same  paper.  Acceptance  is  the  one  most  in  use,  but  Time-Draft  is  the 
term  adopted  in  this  book,  as  it  is  more  readily  comprehended  by  the  pupil- 
it  showing,  at  once,  that  a  certain  time  is  given  in  which  to  pay  the  draft. 
Time-Drafts  are  of  no  value  whatever,  nntil  they  hm'e  been  accepted  and 
returned  to  the  drawers,  or  the  persons  who  draw  the  drafts;  as,  not  until 
then  is  a  written  promise  to  pay  made;  therefore,  no  entry  is  made  until  the 
draft  has  been  returned  accepted,  when  the  entry  is  made  precisely  the  same 
as  if  a  note  had  been  received  or  given. 

143.  There  are  four  kinds  of  drafts,  viz.:  Bank  Drafts,  On-Demand  Drafts, 
Sight  Drafts  and  Time  Drafts.  The  first  three  belong  to  the  Cash  account, 
and  the  last,  as  heretofore  explained,  belongs  to  the  Bills  Receivable  and 
Bills  Payable  accounts.  A  Bank  Draft  is  a  draft  drawn  by  one  bank  on  an- 
other. An  On-Demand  Draft  is  a  draft  drawn  by  one  person  upon  another, 
and  is  payable  on  demand,  or  immediately.  A  Sight  Draft  is  a  draft 
drawn  by  one  person  upon  another  "at  sight,"  and  if  accepted  by  the  per- 
son upon  whom  it  is  drawn  is  payable  just  three  days  after  it  is  accepted. 
Drafts  are  sometimes  drawn  at  "one,  three  or  five  days  sight,"  and  made  pay- 
able to  either  a  banker  or  some  other  person.  When  they  are  thus  drawn 
we  accept  them  in  the  same  manner  that  we  would  a  time  draft,  but 
make  no  entry  of  it,— simply  making  a  memorandum  in  lead  pencil  on  their 
account  in  the  Ledger  similar  to  this:  "Ace.  St.  Draft,"  to  show  that  we 
have  accepted  such  a  draft;  and  when  the  paper  becomes  due  we  pay  it 
and  charge  the  person  direct,  as  we  would  have  done  had  he  drawn  a 
draft  "on  demand"  and  we  paid  it  at  once.  When  drafts  are  drawn  in 
this  way,  and  are  accepted  by  us,  the  bank  to  whom  the  draft  is  made  payable, 
leaves  a  "notice"  with  us  showing  when  the  paper  falls  due,  the  amount  of 
same,  also  collection  charges,  if  any.  When  due,  we  pay  the  draft,  charge 
the  person  and  credit  Cash,  as  it  is  a  cash  transaction.  The  object  in  drawing 
drafts  "at  sight,"  or  "at  one,  three  or  five  days  sight,"  is  so  as  not  "to  take  the 
person  by  surprise,"  but  to  give  him  a  little  time  in  which  to  meet  the  obliga- 
tion; there  being  thus  Ynore  certainty  of  the  draft's  being  paid.  Drafts 
drawn  in  this  way  have  three  days  of  grace  in  addition  to  the  time  given.  It 
is  not  deemed  advisable  to  run  the  entries  through  the  Bills  Payable  account 
when  we  accept  a  draft  drawn  on  such  short  time;  but  when  drawn  on  ten 
days  or  longer  time,  we  call  it  a  Time  Draft,  and  make  the  entry  to  the  Bills 
Payable  account. 

In  California,  Colorado,  Connecticut,  Delaware,  Georgia,  Idaho,  Illinois, 
Louisiana,  Maryland,  New  York,  New  Mexico,  Ohio  and  Pennsylvania— no 
days  of  grace  are  allowed  on  drafts  drawn  "at  sight." 


24 


THE   FOUNDATION. 


144 

TO 

151 


INTEREST  (OR   USE  OF   MONEY). 


144.  Debit  for  all  cash  we  payout 
for  interest  on  the  notes  which  we 
have  given  to  other  parties. 

14G.  Debit  for  amount  deducted 
by  the  bank  from  the  face  of  a  note 
which  we  liave  had  by  them  dis- 
counted. 

148.  Debit  at  the  end  of  the  year 
for  the  accrued  interest  to  date  on 
the  interest-bearing  notes  we  owe. 
(See  i6o  and  163.) 


145.  Credit  for  all  cash  we  receive 
for  interest  on  the  notes  which  we 
have  received  from  other  parties. 

147.  Credit  for  discount  allowed 
to  us  by  other  parties  for  paying  our 
notes  before  due. 

149.  Credit,  at  the  end  of  the  year, 
for  the  accrued  interest  to  date  on 
the  interest-bearing  notes  we  hold 
against  other  parties.  (See  155  and 
158.) 


150.  Directions  for  closing  the  Interest  account  at  the  end  of  the  year : 
a. — Find  the  difference  between  the  two  sides  of  this  account.  If  the 
credit  side  be  the  larger,  the  amount  the  credit  exceeds  the  debit  is  the  gain 
on  Interest; — we  then  write  on  the  debit  side  of  this  account,  in  red  ink,  "To 
Loss  &  Gain"  for  amount  gained.  If  the  debit  side  be  the  larger,  the  amount 
the  debit  exceeds  the  credit  is  the  loss  on  Interest; — we  then  write  on  the 
credit  side  of  this  account,  in  red  ink,  the  amount  lost,  which  in  either  case 
would  make  the  account  balance. 

b. — Rule  the  closing  lines  and  write  the  total  amounts  between  the  lines. 
c. — If  there  be  a  gain,  carry  amount   gained  over  to  the  "Loss  &  Gain 
account," — writing  on  the  credit  side  of  that  account,  in  black  ink,  "By  Inter- 
est," for  amount  of  the  gain.     If  a  loss,  carry  amount  lost  to  the  debit  side, — 
writing  "To  Interest"  for  amount  of  the  loss. 


151.  Exr'r,.\XATlON. — Interest  is  simply  a  term  used  for  the  use  of  money 
When  we  pay  for  the  use  of  money,  we  debit  "Interest"  for  the  use  of  the 
money  which  we  receive,  and  credit  "Cash"  for  the  cash  we  give  for  the  use  of 
that  money.  (See  144  and  146.)  When  we  are  paid  for  the  use  of  money 
which  we  have  given,  we  debit  "Cash"  for  the  cash  we  receive,  and  credit 
"Interest"  for  the  use  of  the  money  we  give.  (See  145  and  147.)  Interest 
does  not  arise  from  notes  only;  for,  when  we  have  an  account  which  is  past  duo 
against  a  customer  of  ours,  we  charge  him  for  interest.  When  this  is  done 
we  debit  the  person  and  credit  "Interest,"  as  we,  in  reality,  give  to  that  per- 
son the  use  of  the  money  for  the  length  of  time  that  his  account  is  past  due. 
When  we  allow  an  account  which  we  are  owing  to  go  past  due,  we  are  some- 
times obliged  to  pay  for  interest; — we  then  debit  "Interest"  and  credit  the 
person  to  whom  we  owe  the  account, — as  we,  in  reality,  receive  from  the  per- 
son the  use  of  the  money  which  should  have  been  paid  when  his  account  was 
due,  from  the  time  when  his  account  was  due,  up  to  the  present  time. 


152 

TO 

157 


THE   FOUNDATION. 

INTEREST   (OR   USE   OF   MONEY).— Continued. 

152.  Discount. — Discount  is  another  term  used  for  tlie  use  of  money; 
therefore,  both  being  the  same  in  effect,  it  is  not  necessary  to  have  an  account 
for  each,  so  we  call  interest  and  discount  the  same,  and  keep  onlyone  account 
on  the  Ledger,  namely:  "Interest." 

153.  When  we  are  in  need  of  money,  we  take  some  of  the  notes  which  we 
hold  against  other  parties  (Bills  Receivable)  to  the  bank  and  get  them  "dis- 
counted." If  these  notes  are  not  drawing  interest,  the  banker  deducts  from  the 
face  of  the  note  a  certain  rate  per  cent,  per  annum  for  the  time  the  note  has 
yet  to  run  before  due,  and  hands  us  the  balance  in  cash.  This  amount 
which  he  deducts  from  the  face  of  the  note  is  the  "discount,"  or  the  amount 
we  pay  him  for  the  use  of  that  money  which  he  hands  us,  for  the  unexpired 
time  on  the  note.  For  example:  If  we  hold  a  note  for  $ioo  which  is  made 
without  interest  and  has  yet  6o  days  to  run  before  due,  and  we  get  it  dis- 
counted in  the  bank,  the  banker,  deducting  $i  for  discount,  hands  us  $99;  we 
then  debit  Cash  for  $100  and  Interest  for  the  discount — $1 — and  credit  Bills 
Receivable  for  the  full  face  of  the  note — $100.     (See  125,  also  490  and  512.) 

154.  When  a  person  to  whom  we  give  a  note  allows  us  a  certain  amount 
for  paying  that  note  before  due,  we  debit  Bills  Payable  for  the  full  face  of  the 
note;  and  credit  "Cash"  for  the  cash  we  pay,  and  "Interest"  for  the  discount 
we  are  allowed. 

Some  business  houses  keep  a  separate  account  for  Discount,  but  this  is  not 
necessary.     (See  also  74.) 

INTEREST   RECEIVABLE.  ' 


155.  Debit,  at  the  end  of  the  year, 
for  the  accrued  interest  to  date  on 
all  the  intere-st-bearing  notes  and 
time  drafts  we  hold  against  other 
parties,  i.  e.,  for  the  total  interest 
due  us  to  date  on  our  Bills  Receiva- 
ble. 


156.  Credit  when  the  accrued  in- 
terest is  paid  which  was  charged  on 
opposite  side  of  this  account. 


157.  Directions  for  closing  the  Interest  Receivable  account  at  the  end  of 
the  year : 

<7.— ImhcI  the  difference  between  the  two  sides  of  this  account,  and  then 
write  on  the  credit  side,  in  red  ink,  "By  Balance"  for  that  difference,  which 
will  make  the  account  balance. 

b. — Rule  the  closing  lines  and  write  the  total  amounts  between  the  lines. 

c. — Write  on  debit  side  of  this  account,  in  black  ink,  below  t-he  closing 
lines,  "To  Balance"  for  amount  of  this  difference, — which  shows  the  balance  of 
interest  which  is  still  due  and  receivable  to  us. 


26 


THE  I'OUNDATION. 

INTEREST   RECEIVABLE.— CoxTiN-UED. 

158.  Explanation. — At  the  end  of  each  year,  we  compute  the  interest 
on  all  the  interest-bearing  Bills  Receivable  we  have  on  hand,  from  the  dates 
Df  such  notes  up  to  the  end  of  the  year;  excepting  those  notes  the  dates  ot 
which  extend  back  over  one  year;  these  notes  we  compute  the  interest  on 
for  only  one  year,  because  the  interest  has  on  these  already  been  computed 
up  to  the  first  of  the  year  and  charged  to  this  account.  Wc  then  debit 
"Interest  Receivable  account"  for  the  total  amount  of  interest  due  us,  and 
credit  the  "Interest  account"  proper,  for  the  same  amount.  Thus  it  will  at 
once  be  seen  that  the  "Interest  Receivable  account"  is  an  account  indicating 
a  resource, — being  the  amount  of  interest  due  us  up  to  the  end  of  the  year; — 
therefore,  it  is  never  carried  over  to  the  "Loss  &  Gain  account,"  the  gain 
on  interest  being  carried  to  the  "Interest  account,"  as  above  indicated. 

159.  The  Interest  Receivable  and  Interest  Payable  accounts  are  such 
"complicated  affairs"  that  they  are  seldom  used  in  business,  unless  one  of  the 
partners  wishes  to  withdraw  from  the  business,  or  unless  they  wish  to  take 
into  the  business  a  new  partner,  at  which  time  they  desire  to  know  the 
exact  worth  of  the  firm;  and  in  order  to  find  this  they  must  ascertain 
how  much  interest  is  due  to  the  firm  on  the  notes  on  hand,  and  how  much 
interest  is  owing  by  the  firm  on  the  interest-bearing  notes  outstanding. 
The  complication  in  these  accounts  arises  in  finding,  at  the  time  the  interest 
is  paid  for,  what  portion  of  the  interest  to  enter  to  Interest  Receivable  or 
Interest  Payable,  and  what  portion  to  the  Interest  proper  account;  and  in 
making  entries  to  so  many  accounts,  when  it  would  be  entirely  proper  and 
much  less  work,  to  keep  only  one  account  instead  of  the  three,  namely, 
"Interest,"  and  make  the  entry  to  that  account  not  until  the  interest  is  paid  for. 


168 

TO 

162 


INTEREST   PAYABLE. 


161.  Debit,  when  the  accrued  in- 
terest is  paid,  which  was  credited  on 
the  opposite  side  of  this  account. 


160.  Credit,  at  the  end  of  the  year, 
for  the  accrued  interest  to  date  on 
all  the  interest-bearing  notes  and 
time-drafts  we  owe,  i.  e.,  for  the  total 
interest  we  owe  to  date  on  our  Bills 
Payable. 


162.  Directions  for  closing  the  Interest  Payable  account  at  the  end  of  the  year'. 
a. — Find  the  difference  between  the  two  sides  of  this  account,  and  write 
on   the   debit  side,  in   red  ink,  "To  Balance"  for  amount   of  that   difference, 
which  will  make  the  account  bjilance. 

b. — Rule  the  closing  lines  and  write  the  total  amounts  between  the  lines. 
c. — Write  on  credit  side  of  this  account,  in  black  ink,  below  the  closing 
lines,  "By  Balance"  for  amount  of  this  difference, — which  difference  is  the 
balance  of  interest  we  owe  for  and  is  payable  by  us. 


27 


163 

To 

173 


THE  FOUNDATION. 

INTEREST  PAYABLE.— Continued. 

163.  Explanation. — At  the  end  of  each  year,  we  compute  the  interest 
on  all  the  interest-bearing  Bills  Payable  we  owe,  from  the  dates  of  such  notes 
up  to  the  end  of  the  year,  with  same  exceptions  as  in  158.  We  then  credit 
"Interest  Payable  account"  for  the  total  amount  of  such  interest  due,  and 
debit  the  Interest  account  proper  for  the  same  amount.  It  will  now  be  seen 
that  the  "Interest  Payable  account"  indicates  a  liability,  being  the  interest 
we  owe  for  up  to  the  end  of  the  year — therefore  is  not  carried  to  the  "Loss 
&  Gain  account,"  but  is  allowed  to  stand  on  our  books  the  same  as  the 
"Bills  Payable  account."  The  loss  on  interest  we  have  to  pay  for  is  carried  to 
the  Interest  account  at  the  time  we  credit  Interest  Payable,  as  indicated  above. 

ACCOUNTS   WITH    PERSONS   TO    WHOM    WE    SELL 
GOODS   OR   LOAN   MONEY. 


164.  Debit,  at  commencement  of 
business,  for  amount  they  owe  us. 

165.  Debit  for  all  merchandise  we 
sell  to  them  on  account. 

166.  Debit  for  all  cash  we  loan  to 
them  on  account,  and  take  no  note 
therefor. 


167.  Credit  for  all  cash  they  pay 
us  on  account. 

168.  Credit  for  all  merchandise 
they  return  to  us  on  account. 

169.  Credit  for  all  checks,  bank 
drafts,  sight  drafts,  money  orders, 
etc.,  etc.  (called  cash),  they  give  to 
us  on  account. 

170.  Credit  for  all  drafts  we  draw 
on  them  at  sight,  on  demand,  or  at 
one,  three  or  five  days  sight,  they 
pay.     (See  143.) 

171.  Credit  for  all  notes  they  give 
to  us  on  account,  made  by  them- 
selves payable  to  us.     (See  108  and 

113.) 

172.  Credit  for  all  time  drafts  we 
draw  on  other  parties  they  accept. 
(See  114,  115  and  142. 


173.  Explanation.— When  we  first  enter  into  business,  we  open  accounts 
with  all  persons  who  are  owing  us,  and  debit  all  such  persons  for  the  amounts 
they  owe  us.  Whenever  we  sell  a  person  goods  and  do  not  receive  payment 
therefor,  or  whenever  we  loan  money  to  a  person  and  do  not  take  a  note  for 
the  amount  of  that  loan,  we  debit  the  person;  and  when  these  persons  to 
whom  we  sell  the  goods  or  loan  the  money  pay  us  in  any  wa\-,  or  give  u.s  a 
note,  or  accept  a  time  draft  which  we  draw  on  them,  we  credit  them.  (For 
remarks  on  balancing  this  account  at  the  end  of  the  year  see  308  and  321.) 


28 


THE   I'OUNDATION. 

ACCOUNTS   WITH    PERSONS   FROM   WHOM    WE   BUY 
GOODS  OR   BORROW   MONEY. 


174 

TO 

IBS 


177.  Debit  for  all  cash  we  pay 
them  on  account. 

178.  Debit  for  all  merchandise  we 
return  to  them  on  account. 

179.  Debit  for  all  checks,  bank 
drafts,  sight  drafts,  money  orders, 
etc.  (called  cash),  wc  give  them  on 
account. 

180.  Debit  for  all  drafts  they  draw 
on  us  at  sight,  on  demand,  or  at  one, 
three  or  five  days  sight,  we  pay. 
(See  143) 

181.  Debit  for  all  notes  we  give 
them  on  account,  made  by  us  paya- 
ble to  them.     (See  130  and  131.) 

182.  Debit  for  all  time  drafts  they 
draw  on  us  we  accept.  (See  132,  133 
and  142.) 


174.  Credit,  at  commencement  of 
business,  for  amount  we  owe  them. 

175.  Credit  for  all  merchandise  we 
buy  from  them  on  account. 

176.  Credit  for  all  cash  wc  borrow 
from  them  on  account. 


183.  Explanation.— When  we  commence  business,  we  open  accounts 
with  all  the  persons  we  are  owing,  and  credit  all  such  persons  for  the  amounts 
we  are  owing  them.  Whenever  we  buy  goods  and  do  not  pay  the  person 
from  whom  we  buy,  or  whenever  we  borrow  money  and  do  not  give  the  per- 
son a  note  for  the  amount  borrowed,  we  credit  the  person;  and  when  we  pay 
these  persons  from  whom  we  bought  the  goods  or  borrowed  the  money,  or 
give  them  a  note,  or  accept  a  time  draft  which  they  draw  on  us,  we  debit 
them. 


TAXES. 


184.  Debit  for  all  cash  we  pay  out 
for  city,  county  and  other  taxes. 


185.    Directions  for  closing  the  Taxes  account  at  the  end  of  t/ie  year: 
a. — Write  on   the  credit  side,  in   red  ink,  "By  Inventory,"  for  approxi- 
mated value  of  unexpired  Taxes. 

b. — Find  the  difference  between  the  two  sides  of  this  account,  and  write 
on  the  credit  side,  in  red  ink,  "By  Loss  &  Gain"  for  amount  of  this  differ- 
ence, wliich  will  make  the  account  balance. 


29 


186 

TO 

192 


THE   FOUNDATION. 


TAXES.— Continued. 

c. — Rule  the  closing  lines  and  write  the  total  amounts  between  these  lines. 

d. — Write  on  debit  side  of  this  account,  in  black  ink,  below  the  closing 
lines,  "To  Inventory"  for  this  amount  of  unexpired  Taxes,  for  beginning  of 
the  new  year. 

e. — Write  on  the  debit  side  of  Loss  &  Gain  account,  in  black  ink, 
"To  Taxes"  for  amount  of  loss  as  found  in  "2d." 

186.  Explanation.— We  debit  Taxes  for  all  cash  we  pay  out  for  taxes  on 
our  property.  At  the  end  of  the  year  we  approximate  the  value  of  taxes  still 
unexpired,  and  call  that  approximated  value  a  Resource;  consequently,  we 
close  the  account  as  per  above  directions. 


INSURANCE. 


187.  Debit  for  all  cash  we  pay  out 
for   insurance   on   goods   and  build- 


188.  Closing  and  Explanation. — The  directions  for  closing  the  Insur- 
ance account,  and  also  the  explanation,  are  exactly  the  same  as  in  the  Taxes 
account;  consequently,  for  directions  for  closing  and  for  explanation,  we  refer 
to  185  and  186,  and  while  reading  same,  substitute  "Premiums  on  Policies" 
where  we  find  "Taxes."  All  business  houses  do  not  approximate  the  value 
of  unexpired  Taxes  and  "Premiums  on  Policies"  at  the  end  of  the  year,  but 
call  the  whole  amount  a  loss  at  once. 


EXPENSE. 


189.  Debit  for  everything  we  buy 
to  use  ourselves  and  not  sell  again, 
as  postage  stamps,  stationery,  fuel, 
etc. 

190.  Debit  for  all  cash  we  pay  out 
and  receive  an  equivalent  in  some- 
thing we  cannot  sell  again,  as:  clerk 
hire,  freight  and  e.xpress  charges, 
insurance,  rent,  drayage,  etc,  etc. 


191.  Credit  for  everything  we  sell 
for  which  wc  debited  E.xpensc  when 
the  article  was  bought. 


192.    Directions  for  closing  the  Expense  account  at  the  end  of  the  year  : 
a. — Write  on  the  credit  side,  in  red  ink,  "By  Inventory"  for  value  of  the 
salable  articles  we  have  on  hand,  for  which  we  debited  Expense  when  those 
articles  were  bought. 


THE   KOUNDATION. 

EXPENSE.— Continued. 

^. — Find  the  difference  between  the  two  sides  of  this  account,  and  write 
on  the  credit  side,  in  red  ink,  "By  Loss  &  Gain"  for  that  difference,  which 
will  make  the  account  balance. 

c. — Rule  the  closing  lines  and  write  the  total  amounts  between  the  lines. 

</.— Bring  down  on  the  debit  side,  below  the  closing  lines,  in  black  ink, 
"To  Inventory"  the  value  of  salable  articles  on  hand,  as  found  in  "ist,"  for 
beginning  of  the  new  year. 

e. — Write  on  the  debit  side  of  Loss  &  Gain  account,  "To  Expense"  for 
amount  of  loss  on  this  account,  as  found  in  "2d"  above. 

193.  Explanation. — In  reading  over  rules  189  and  190,  it  will  at  once  be 
seen  that  no  business  can  be  conducted  without  an  expense;  it  will  also  be 
seen  that  the  Expense  account  is  the  "foe  in  the  field"  against  which  the 
business  man  has  to  contend.  All  transactions  which  result  in  a  loss  to  us 
may  be  carried  into  the  Expense  account,  or  the  account  may  be  divided  into 
as  many  accounts  as  we  wish  to  keep  to  represent  the  losses  occasioned  in  our 
business. 

194.  As  it  is  a  matter  of  gratification  to  the  business  man  to  have  a  more 
explicit  and  comprehensive  statement  of  the  expenses  at  the  end  of  the  year, 
it  becomes  necessary  for  him  to  classify  his  expenses  by  opening  accounts  for 
the  different  items  of  expense;  and  whenever  an  amount  is  expended  which 
would  otherwise  be  debited  to  Expense,  it  is  debited  instead  to  the  account 
to  which  it  belongs.  For  example:  If  the  business  man  wishes  to  know  how 
much  he  expends  during  the  year  for  clerk-hire,  he  keeps  an  account  called 
"Salaries,"  and  debits  that  account,  instead  of  Expense,  whenever  anything  is 
expended  for  clerk-hire;  or,  if  he  wishes  to  know  how  much  is  expended  for 
freight  and  express  charges,  fuel,  rent,  drayage,  insurance,  advertising,  travel- 
ing expenses,  etc.,  etc.,  he  opens  an  account  with  each,  and  whenever  amounts 
are  e.xpended  which  would  otherwise  be  debited  to  Expense,  they  are,  instead, 
debited  to  the  respective  accounts  to  which  they  belong.  When  we  thus 
divide  the  account  we  debit  Expense  account  for  all  such  items  of  expense  as 
do  not  come  under  any  of  the  accounts  thus  opened. 

195.  When  we  take  an  inventory  at  the  end  of  the  year  we  sometimes 
take  an  account,  or  find  the  value  of  the  unused  salable  expense  articles  we 
have  on  hand,  i.  e.,  articles  that  were  debited  to  Expense  when  bought,  such 
as  fuel,  postage  stamps,  etc., — we  then  close  the  account  according  to  direc- 
tions on  this  account.  When  we  do  not  take  an  inventory  in  this  way  we 
close  the  account  simply  according  to  "2d,  3d  and  5th,"  of  192. 

196.  All  accounts  we  open  in  the  Ledger,  in  which  to  debit  articles  we 
buy  to  consume  in  the  business,  i.  e.,  to  use  ourselves  and  not  sell  again,  we 
close  at  the  end  of  the  year  in  the  same  manner  in  which  the  Fuel  account  is 
closed.  (See  200.)  These  articles  must,  however,  be  such  as  would  be  of 
value  to  anyone  else,  and  consequently,  salable  articles. 


193 

TO 

196 


197 

TO  THE   FOUNDATION. 

203 

EXPENSE.— Continued. 

197.  All  accounts  we  open  in  the  Ledger,  in  which  to  debit  amounts  that 
are  at  once  and  in  entirety  a  "dead  loss,"  we  close  at  the  end  of  the  year  in 
the  same  manner  in  which  the  Salaries  account  is  closed  (see  202),  except- 
ing that  we  write  on  the  Loss  &  Gain  account  the  name  of  the  account  on 
which  such  loss  was  made. 


FUEL. 


198.  Debit  for  all  fuel  we  buy  to 
consume  in  our  stoves  and  furnaces. 


199.  Credit  for  all  fuel  we  sell. 


200.    Directions  for  closing  the  Fuel  account  at  the  end  of  the  year : 

a. — Write  on  the  credit  side,  in  red  ink,  "By  Inventory"  for  value  of  fuel 
remaining  on  hand  unused. 

b. — Find  the  difference  between  the  two  sides  of  this  account,  and  write 
on  the  credit  side,  in  red  ink,  "By  Loss  &  Gain"  for  this  difference,  which  will 
make  the  account  balance.  The  difference  thus  found  will  be  the  amount  of 
fuel  we  have  consumed. 

c. — Rule  the  closing  lines  and  write  the  total  amounts  between  the  lines. 

d. — Write  on  the  debit  side,  in  black  ink,  below  the  closing  lines,  "To 
Inventory"  for  the  amount  of  fuel  we  have  on  hand  for  the  beginning  of  the 
new  year. 

e. — Write  on  the  debit  side  of  Loss  &  Gain  account,  in  black  ink,  "To 
Fuel"  for  amount  lost  on  this  account. 


SALARIES   (OR    LABOR). 


201.  Debit  for  amount  we  allow 
or  pay  our  employes  for  services. 


202.  Directions  for  closing  the  Salaries  account  at  the  end  of  the  year: 

a. — If  there  are  any  credits  on  this  account,  find  the  difference  between 
the  two  sides  and  write  on  the  credit  side,  in  red  ink,  "By  Loss  &  Gain"  for 
the  difference.  If  there  are  no  credits,  simply  find  the  total  amount  of  the 
debit  side,  and  write  on  the  credit  side,  in  red  ink,  "By  Loss  &  Gain"  for 
such  amount. 

b. — Rule  the  closing  lines  and  write  the  total  amounts  between  the  lines. 

c. — Write  on  the  debit  side  of  Loss  &  Gain  account,  in  black  ink,  "To 
Salaries"  for  amount  lost  on  this  account,  as  found  in  "1st"  above. 

203.  Explanation. — When  we  pay  our  clerks,  book-keepers,  etc.,  weekly, 
semi-monthly  or  monthly,  the  total  amounts  due  them,  it  is  not  necessary  to 


204 


THE   FOUNDATION. 


SALARIES   (OR   LABOR).— Continued. 

keep  an  account  with  each,  but  debit  the  amount  paid   them  directly  to  the 

Salaries  account. 

204.  If  we  do  not  pay  them  regularly  the  amounts  due  them,  but  allow 
them  to  draw  from  their  salary  at  pleasure,  we  then  open  an  account  for  each 
of  our  employes,  debiting  them  whenever  they  draw  any  money,  or  take  any 
merchandise  for  their  private  use;  and  crediting  them  at  the  end  of  each 
month  for  their  salary  for  the  month.  When  we  do  this,  on  the  last  day  of 
the  month  we  enter  in  the  Journal  "Salaries  Dr.  to  Sundries,"  and  under  this 
heading,  we  enter  the  names  of  each  of  our  employes,  giving  each  credit  for 
his  salary;  and  after  we  have  the  names  and  amounts  all  entered,  we  find  the 
total  of  these  amounts  and  debit  Salaries  account  for  such  total  amount  in  one 
entry.  If  the  members  of  the  firm  allow  themselves  a  salary  from  which  to 
draw,  their  names  are  entered  with  the  employes  and  their  private  accounts 
treated  the  same  as  the  accounts  with  the  employes.  The  accounts  thus 
formed  with  our  employes  are  the  same  as  any  personal  accounts  we  owe, 
unless  the  employe  overdraws  his  account,  and  then,  of  course,  "the  shoe  is 
on  the  other  foot,"  being  then  the  same  as  a  personal  account  owing  us. 


FREIGHT   AND   EXPRESS. 


205.  Debit  for  all  cash  we  payout 
for  freight  and  express  charges. 


206.  Credit  for  all  cash  we  receive 
from  Railroad  or  Express  companies 
as  rebate  or  overcharge  on  freight  or 
express. 


207.  Closing. — The  Freight  &  Express  account  is  closed  the  same  as 
the  Salaries  account.  (See  202.)  Some  firms,  however,  carry  the  amount 
lost  on  freight  and  express  to  the  Merchandise  account,  instead  of  to  the 
Loss  &  Gain  account,  at  the  end  of  the  year,  reasoning  thus:  That  the 
merchandise  really  costs  them  the  price  of  the  goods  plus  the  freight.  This 
is,  in  fact  the  case;  but  the  usual  custom  in  practice  is  to  carry  the  Freight 
&  Express  account  over  to  Loss  &  Gain  with  the  other  accounts  on  which 
we  lose  or  gain. 


208.  Explanation. — Some  Railroad  companies  allow  those  business 
houses  who  have  large  quantities  of  freight  shipped  over  their  lines  a 
"rebate,"  or  "drawback."  This  rebate  they  usually  settle  monthly,  and  when 
they  pay  it,  we  credit  Freight  &  Express  account;  unless,  we  open  an  account 
with  the  Railroad  company  in  which  to  charge  such  overcharges;  we  then,  of 
course,  credit  the  Railroad  company's  account  when  they  settle  for  the  charges 
we  have  against  them.  These  Railroad  companies  have  (they  say)  a  certain 
rate  from  which  they  must  not  deviate;  consequently,  all  their  freight   bills 


209 

TO 

316 


THE   FOUNDATION. 


FREIGHT  AND    EXPRESS.— Continued. 

must  be  made  out  (for  the  same  class)  at  the  same  rate  per  lOO  lbs.;  yet  they 
must  recognize  the  excess  of  patronage  in  an  extensive  establishment  over  a 
small  house  in  charges  for  freight,  in  the  same  manner  as  a  wholesale  mer- 
chant does  one  customer  over  another,  and  to  do  this,  the  freight  company 
must  resort  to  "rebate." 


COLLECTION   AND   EXCHANGE. 

209.  Debit  for  all  cash  we  pay  out    |         210.    Credit    for    rebate   on 


for  collection  of  drafts,  notes  and 
checks;  and  for  exchange  on  bank 
drafts,  postoffice  orders,  etc. 


change,  if  any. 


211.    Closing. — The  Collection  &  Exchange  account  is  closed  at  the  end 
of  the  year  the  same  as  the  Salaries  account.     (See  202.) 


212.  Explanation.— Some  banks  allow  their  customers  who  purchase 
large  quantities  of  exchange  a  rebate,  for  the  same  reason  that  the  railroad 
companies  allow  their  patrons  a  rebate  on  freight.  (See  208.)  When  they 
allow  us  a  rebate,  and  pay  or  give  us  credit  for  same,  we  then  credit  Collec- 
tion &  Exchange.  If  the  bank  simply  gives  us  credit  in  our  bank  book, 
which  they  usually  do,  we  debit  Cash  and  credit  Collection  &  Exchange; 
and  then  enter  on  the  stub  of  our  check  book  the  amount  thus  credited  to  us, 
as  though  it  had  been  a  deposit  made  by  us,  consequently  increasing  our 
deposit  in  the  bank  that  amount. 

TRAVELING  EXPENSES. 


213.  Debit  for  amount  paid  to  our 
traveling  agents,  or  exoended  by  our- 
selves for  traveling  expenses. 


214.    Closing. — The  Traveling  Expenses  account  at  the  end  of  the  year 
closed  the  same  as  the  Salaries  account.     (See  202.) 


215.  Explanation.— This  account  is  used  only  in  a  wholesale  house 
where  they  employ  traveling  agents  to  sell  their  goods.  There  are  many 
ways  of  treating  the  Traveling  Expenses  account,  principal  among  which  are 
the  following  methods: 

21(>.  First  Method.  — Some  business  houses  employ  traveling  agents, 
paying  them  a  regular  salary  and  telling  them  to  go  out  and  sell  their 
goods,  and  they  will  pay  alf  their  expenses,  whatever  they  may  be.    When  this 

34 


217 

THE  FOUNDATION.  TO 

219 

TRAVELING   EXPENSES.— Continued. 

is  done  the  expenses  may  be  charged  directly  to  the  TravcUng  Expensei 
account;  or,  an  "Agent  account"  may  be  opened  for  each  of  the  travehng 
agents,  and  when  an  amount  is  reported  expended  for  expenses  by  an  agent, 
the  amount  may  be  charged  to  this  Agent  account, — and  at  tiie  end  of  each 
month,  or  at  the  end  of  tlie  year,  as  we  may  prefer,  this  "Agent  account"  may 
be  balanced  by  writing  on  the  credit  side,  in  red  ink,  "By  Traveling  Expen- 
ses" for  the  total  amount  of  same,  and  carrying  this  amount  over  to  the  debit 
side  of  Traveling  Expenses  account,— writing  there,  in  black  ink,  the  name  of 
the  age  at  by  whom  this  amount  was  expended.  When  we  keep  an  "Agent 
account"  in  this  way,  it  is  simply  as  a  matter  of  satisfaction  to  us  to  know 
how  much  is  expended  by  each  agent. 

217.  Second  Method. — Some  business  houses  pay  their  traveling  agents  a 
regular  sjilary,  and  allow  them  besides  a  certain  amount  per  day,  per  month, 
or  per  year,  for  traveling  expenses.  When  this  is  done,  an  "Agent  account" 
may  be  opened  in  the  Ledger  for  each  agent,  and  these  accounts  debited 
whenever  any  money  is  drawn  for  traveling  expenses;  then  at  the  end  of  each 
month  an  entry  may  be  made  on  the  Journal  thus:  "Traveling  Expenses  Dr. 
to  Sundries,"  and  under  this  heading  enter  the  names  of  all  our  traveling 
agents,  adding  "Agent  account"  after  each  name,  crediting  to  the  respective 
Agent  accounts  the  amounts  allowed  them  for  expenses.  The  difference  may 
then  be  found  between  the  two  sides  of  the  respective  "Agent  accounts," 
the  Agent  account  balanced  the  same  as  in  first  method;  excepting,  that  this 
difference,  instead  of  being  carried  to  the  Traveling  Expenses  ^account,  is 
carried  to  the  personal  account  of  the  agent,  i.  e.,  the  account  upon  which  is 
entered  his  regular  salary, — debiting  the  personal  account  of  the  agent,  if  he 
has  drawn  more  than  allowed  by  the  firm  for  expenses,  or  crediting  it  if  he 
has  drawn  less. 

218.  Third  Method. — When  the  traveling  agent  is  allowed  a  certain 
amount  per  day,  per  month  or  per  year  for  traveling  expenses,  instead  of 
opening  an  "Agent  account,"  as  in  Second  Method,  we  may,  when  an  amount 
is  drawn  for  expenses,  charge  the  amount  directly  to  the  personal  account  of 
the  agent, — thus  at  the  end  of  each  month,  make  an  entry  on  the  Journal  the 
same  as  described  in  Second  Method,  excepting,  instead  of  adding  "Agent 
account"  after  each  name,  and  crediting  the  amounts  to  the  Agent  accounts, 
we  credit  the  amounts  allowed  for  traveling  expenses  directly  to  the  personal 
accounts  of  the  agents. 

219.  Fourth  Method. — Some  houses,  in  addition  to  a  regular  salary  and  a 
certain  amount  for  traveling  expenses,  pay  their  traveling  agents  a  certain 
percentage  commission  on  the  sales  they  make— sometimes  on  the  sales  from 
the  beginning,  and  sometimes  not  until  their  sales  have  reached  a  certain 
amount.  This  is  partly  done  to  insure  extra  efforts  on  the  part  of  the 
agent  to  mate  large  sales,  and  partly  to  siiow  their  appreciation  of  his 
hard  work-    When  this  is  done,  the  commission  thus  allowed  may  be  charged 

.^5 


220 

2¥2 


THE   FOUNDATION. 

TRAVELING    EXPENSES.— Continued. 

to  anyone  of  the  three  following  accounts,  viz.:  Agents'  Commission,  Mer- 
chandise or  Traveling  Expenses,  and  credited  either  to  the  agent's  personal 
account  or  to  his  "Agent  account."  The  better  way,  perhaps,  is  to  open  an 
"Agents'  Commission  account"  in  the  Ledger,  and  at  the  end  of  each  month 
make  an  entry  on  the  Journal  thus:  "Agents'  Commission  Dr.  to  Sundries," 
and  under  this  heading  enter  the  names  of  all  the  agents  to  whom  we  pay 
commission  on  sales,  crediting  either  their  "Agent  accounts"  or  their  per- 
sonal accounts  for  the  commission  due  them,  and  debiting  the  "Agents'  Com- 
mission account"  for  the  total  amount. 

220.  Fifth  Method. — There  are  a  few  business  houses  who  do  not  pay 
their  agents  a  regular  salary,  but  simply  pay  them  a  certain  per  cent,  com- 
mission on  the  sales  they  make,  allowing  the  agents  to  defray  their  own 
expenses.  When  this  is  done,  the  commission  thus  allowed  may  be  charged 
to  any  one  of  the  three  accounts  as  described  in  Fourth  Method,  and  credited 
at  the  end  of  each  month  directly  to  the  agent's  personal  account.  This  is  a 
method  seldom  used  in  business,  as  there  are  but  few  agents  who  are  willing 
to  engage  with  a  house  on  such  terms. 

221.  Thus  it  will  be  seen  that  the  "Agent  accounts"  are  always  balanced 
at  the  end  of  each  month,  and  carried  either  into  the  Traveling  Expenses 
account  or  into  \.\v&  personal  account  of  the  agent  direct, — consequently,  these 
Agent  accounts  are  simply  transient,  and  remain  open  only  a  month  at  a 
time.  However,  there  are  a  few  exceptions  to  this  rule,  in  which  the  accounts 
are  closed  only  at  the  end  of  the  year — these  exceptions  occurring  usually 
under  the  First  Method.  When  the  "Agent  accounts"  are  closed  only  at  the 
end  of  the  year,  they  are  then  carried  into  the  Traveling  Expenses  account, 
and  show  the  amount  expended  by  each  agent  for  the  entire  year  in  one 
entry. 

222.  The  traveling  agents'  personal  accounts  are  of  course  credited  for 
their  salaries  at  the  end  of  each  month,  the  same  as  the  accounts  with  our 
other  employes,  and  thereafter  treated  the  same  as  any  other  personal 
account.     (See  204.) 


36 


THE    I'OUNDATION. 

BRANCH    HOUSES. 


TO 

234 


223.  Debit  for  all  merchandise 
we  send  to  them  from  our  stock  of 
goods. 

234:.  Debit  for  all  merchandise 
we  buy  and  have  sent  direct  to 
them. 

225.  Debit  for  all  merchandise 
they  buy  on  account  for  which  \vc 
are  to  pay. 

226.  Debit  for  all  cash  or  other 
values  we  give  them. 

227.  Debit,  at  the  end  of  the  year, 
for  amount  reported  as  the  net  gain 
in  the  business  transacted  by  them 
during  the  year. 


228.  Credit  for  all  merchandise 
we  buy  from  them  on  account. 

229.  Credit  for  all  merchandise 
they  return  to  us  after  they  have 
bought  it. 

2:50.  Credit  for  all  cash  they  pay 
us  on  account. 

231.  Credit  for  all  notes,  accept- 
ances, etc.,  they  turn  over  to  us. 

232.  Credit,  at  the  end  of  the 
year,  for  amount  reported  as  the 
net  loss  in  the  business  transacted 
by  them  during  the  year. 


OUR   ACCOUNTS  WITH   THEM. 

233.  Explanation.— The  accounts  with  our  Branch  Houses  arc  kept  on 
the  same  principle  as  the  "Accounts  with  Persons  to  whom  we  Sell  Goods' 
(See  164  to  173),  consequently  are  neither  more  nor  less  on  our  books  than 
s\m'p\y  persottal  accounts.  When  we  close  our  books  at  the  end  of  the  year, 
we  allow  these  accounts  to  stand  on  the  Ledger  untouched,  calling  the 
accounts  Resources. 

234.  We  debit  our  Branch  Houses  whenever  we  send  them  any  goods  from 
our  stock.  Some  houses  charge  these  goods  at  their  cost,  and  others  charge 
them  at  a  profit.  When  we  buy  goods  on  account  and  receive  bills  therefor, 
some  of  which  goods  were  bought  for  our  Branch  Houses,wemarkon  such  bills 
the  names  of  the  Branch  Houses  to  which  tjiey  belong.  When  we  enter  our  bills, 
we  can  adopt  either  one  or  the  other  of  two  methods,  viz.:  1st.— (i)  To  assort 
the  bills,  getting  those  bills  together  which  are  for  goods  for  our  own  stock, 
and  debiting  our  merchandise  account  for  same,  crediting  each  o\  the  i)artics 
from  whom  we  buy;  then  getting  those  together  which  are  for  the  different 
Branch  Houses,  and  debiting  the  respective  Branch  Houses  for  the  bills  belong- 
ing to  each  and  crediting  the  parties  from  whom  we  buy;  or  (2)  to  have  a 
"Merchandise"  column  and  a  column  for  each  of  our  Branch  Houses,  and  carry 
out  the  amounts  in  the  columns  to  the  debit  of  the  respective  accounts  to 
which  they  belong,  crediting  the  parties  from  whom  we  buy  for  such  amounts 
— the  respective  Branch  Houses  accounts  and  the  Merchandise  account  being 
debited  only  at  the  end  of  J:he  month  for  the  total  purchases  for  each  for  the 
month.  The  last  named  is  the  plan  adopted  by  the  larger  houses— where 
they  have  a  book  ruled  with  these  extra  columns,  which  book  they  use  exclu- 
sively  for  entering  the   bills  of  their  purchases.     2d. — The  second   method 

2>7 


235 

TO 

237 


THE   FOUNDATION. 

BRANCH   HOUSES.— Continued. 

is  to  debit  our  Merchandise  account  for  all  the  goods  we  bu)-,  whether  for  our 
own  stock  or  for  our  Branch  Houses,  crediting  the  parties  from  whom  we  buy; 
and  then  to  debit  the  Branch  Houses  and  credit  Merchandise  for  such  good« 
as  were  bought  for  them.  This  method  requires  much  more  work  than  the 
first,  because  we  are  obhged  to  copy  upon  our  Sales  Books  the  items  on 
the  bills  which  were  sent  to  the  Branch  Houses.  It  is  the  general  custom 
of  the  Parent  House  to  assume  all  the  liabilities  of  the  Branch  Houses,  conse- 
quently, to  pay  all  the  bills  contracted  by  tliem. 

335.  We  credit  our  Branch  Houses  whenever  we  get  goods  from  thcni  with 
which  to  replenish  our  stock  on  some  lines  in  which  we  had  become  short; 
and  for  all  the  cash  they  send  to  us  on  account;  and  for  all  notes,  acceptances, 
etc.,  which  they  have  received  from  their  customers  and  turn  over  to  us. 

236.  At  the  end  of  the  year,  when  our  Branch  Houses  report  the  net  gain 
or  net  loss  by  each,  we  debit  or  credit  each  of  the  respective  Branch  Houses 
accounts,  and  debit  or  credit  our  Loss  &  Gain  account  for  the  net  loss  or 
nee  gain  by  each  reported.  If  A  NET  gain.— If  a  Branch  House  reports  a  net 
gain  in  the  business,  we  debit  the  Branch  House  account  and  credit  our  Loss 
&  Gain  account  for  such  gain,  writing  on  the  credit  side  of  the  Loss  & 
Gain  account,  as  an  explanation,  the  name  of  the  Branch  House  upon  which 
the  gain  was  made.  Having  made  this  entry,  the  difference  between  the 
two  sides  of  our  account  with  the  Branch  House  should  show  the  present 
worth  of  that  house  or  the  amount  they  owe  us,  which  amount  should  just 
agree  with  the  difference  between  their  total  Liabilities  and  their  total 
Resources  (excluding  their  account  with  us).  If  A  NET  LOSS.— If  the  Branch 
House  reports  a  net  loss  in  the  business,  we  credit  the  Branch  House  account 
and  debit  our  Loss  &  Gain  account  for  such  loss,  writing  on  the  debit  side 
of  the  Loss  &  Gain  account,  as  an  explanation,  the  name  of  the  Branch 
House  upon  which  the  loss  was  made.  Having  made  this  entry,  the  dif- 
erence  between  the  two  sides  of  the  Branch  House  account  should  show  the 
present  worth  of  that  house,  or  the  amount  they  ought  now  to  have  credited 
to  our  account  on  their  Ledger,  which  amount  should  just  agree  with  the 
difference  between  their  total  Liabilities  and  their  total  Resources  (excluding 
their  account  with  us).  If  the  Branch  Houses  keep  a  Stock  account,  in  addi- 
tion to  the  Personal  accounts  with  the  Parent  House,  that,  of  course,  must 
too  be  excluded  from  the  Resources  and  Liabilities  and  included  in  the 
remarks  "their  account  with  us"  heretofore  used. 

HOW   THEIR   BOOKS  ARE   KEPT. 

237.  Our  branch  houses  each  keep  a  full  set  of  books  in  the  same  mannei 
as  we  kcop  our  books,  and  precisely  the  same  as  books  are  kept  in  any  busi- 
ness, treating  our  account  on  their  Ledger  the  same  as  they  would  any  other 
accounts  with  persons  from  whom  they  bought  goods  on  account,  with  the 
following  two  exceptions,  viz.:     1st   (i),  instead  of  crediting  parties  from 

38 


THE   1-OUNDATION. 

BRANCH    HOUSES— Continued. 

whom  they  buy  goods  on  account,  they  turn  the  bills  over  to  us  to  pay,  debit- 
ing their  Merchandise  account  for  the  same  and  crediting  their  account  with 
us;  or  (2)  they  can  debit  their  Merchandise  account  and  credit  the  parties; 
afterward,  when  they  turn  over  the  bills  to  us  to  pay,  charge  the  parties  and 
credit  us,  which  amounts  to  the  same  but  makes  more  work.  It  is  not  neces- 
sary for  the  Branch  Houses  to  submit  the  bills  to  the  Parent  House,  but  simply 
to  make  an,  itemized  statement  of  the  debts  contracted  with  the  different  per- 
sons, and  from  this  statement  the  Parent  House  can  charge  the  Branch  House 
and  credit  the  different  parties. 

238.  When  the  Branch  Houses  are  first  opened,  they  open  their  books  in 
the  same  way  that  books  are  opened  in  any  store  or  business,  excepting  that 
they  credit  the  Parent  House  for  the  net  investt)icnt ;  and  at  the  end  of  the 
year  the  proceedings  for  closing  the  books  are  the  same  as  in  any  other  busi- 
ness— finally  debiting  or  crediting  the  Parent  House  for  the  net  loss  or  the  net 
gain  in  the  business. 

239.  Either  of  two  methods  may  be  adopted  by  the  Branch  Houses  in 
keeping  the  accounts  with  the  Parent  House,  viz.:  ist.^— To  each  open  two 
accounts  with  the  Parent  House— a  Stock  account  and  a  Personal  account- 
debiting  or  crediting  the  Stock  account  at  the  end  of  the  year  for  the  net 
loss  or  the  net  gain,  as  the  case  may  be;  and  treating  che  Personal  account 
as  described  in  236.  2d. — To  keep  only  one  account  with  the  Parent  House, 
namely,  a  Personal  account, — entering  all  transactions  with  the  Parent  House 
during  the  year  into  that  account,  and  at  the  end  of  the  year  debiting  or 
crediting  that  account  for  the  net  loss  or  the  net  gain.  If  a  Stock  account 
is  opened  with  the  Parent  House  when  the  Branch  first  commences  business, 
there  can  be  no  entry  to  this  account,  for  everything  belongs  to  the  Parent 
House  and  must  necessarily  be  credited  to  the  Personal  account  of  that  House, 
and  not  to  its  Stock  account;  but  at  the  end  of  the  year  the  net  loss  or  net 
gain  may  be  carried  to  the  Stock  account,  and  that  would  be  the  only  iterr. 
that  would  appear  on  that  account; — therefore,  it  is  deemed  the  better  method 
to  keep  only  a  Personal  account  with  the  Parent  House. 

240.  The  Branch  Houses  render  statements  to  us  of  all  their  expenses, 
their  purchases,  their  sales,  etc.,  daily,  weekly  or  monthly,  according  to 
arrangement;  and  these  statements  are  filed  away  by  us  simply  as  memoran- 
da, no  entry  being  made  on  our  books,  unless  it  be  on  a  record  book,  which 
is  not  often  done,  as  these  reports  are  simply  made  out  for  our  own  satisfac- 
tion, in  order  that  we  may  know  the  progress  of  the  business  in  the  different 
Branches.  These  Branch  Houses  at  the  end  of  the  year  each  report  to  the 
Parent  House  the  net  gain  or  net  loss  in  the  business,  as  the  case  ma)-  be. 
(See  236.) 


39 


238 

TO 

240 


341 

242 


THE   FOUNDATION. 


SHIPPING   BUSINESS. 


2il.  That  business  in  which  we  engage  for  the  purpose  of  buying  goods 
and  shipping  them  to  others  to  be  sold— the  persons  to  whom  we  ship  the 
goods  charging  us  for  the  selling  of  same  a  certain  percentage  on  the  sales — 
is  called  "Shipping  Business."  When  we  first  enter  into  business,  the  books 
are  opened  the  same  as  in  a  general  merchandise  business;  the  books  are  the 
same  as  those  used  in  any  other  business,  with  the  exception  of  a  book  called 
"The  Shipping  Ledger,"  the  use  of  which  will  be  hereinafter  described.  The 
principal  books  are  the  Shipping  Ledger,  the  Journal,  the  Cash  Book  and  the 
Ledger.  A  Merchandise  account  is  kept  in  the  Ledger,  which  is  charged  for 
all  merchandise  we  buy  and  credited  for  all  merchandise  we  sell. 

SHIPMENTS. 

242.  The  Shipping  Ledger.— The  Shipping  Ledger  is  a  book  used 
simply  as  a  record  book,  in  which  to  make  a  record  of  the  goods  we  place  in 
the  hands  of  others  to  be  sold.  It  is  used  as  a  book  of  original  entry;  i.  e., 
when  a  shipment  is  made  it  is  at  once  recorded  in  this  book.  A  book  ruled 
in  the  common  Ledger  form  is  suitable  for  the  Shipping  Ledger.  When  we 
make  a  shipment,  an  account  is  opened  in  this  book  with  the  person  to  whom 
we  ship.  On  the  debit  side  is  entered  first  the  date,  then  the  items,  then  the 
cost  price  of  the  goods,  and  under  this  is  entered  the  charges  which  we  pay  for 
drayage,  etc.  After  a  shipment  has  been  thus  recorded,  the  account  here 
opened  is  allowed  to  stand  until  the  party  to  whom  we  shipped  the  goods 
venders  to  us  an  Account-Sales;  we  then  enter  on  the  credit  side  opposite  the 
charge,  the  net  proceeds  of  the  sales  thus  reported;  after  which,  we  debit  the 
person  and  credit  Merchandise  in  the  Journal,  simply  entering  the  person's 
name,  the  amount,  and  the  Shipping  Ledger  page  upon  which  may  be  found 
the  record  of  the  sale  in  detail.  An  account  is  then  opened  in  the  gei>eral 
Ledger  for  this  person;  the  amount  thus  charged  to  him  in  the  Journal  is 
posted  to  the  debit  side  of  his  account  here  opened,  and  this  account  credited 
when  remittance  is  made  for  the  net  proceeds.  An  extra  column  may  be  kept 
in  the  Journal  in  which  to  enter  the  merchandise  sales,  which  will  render  it 
unnecessary  to  post  the  Merchandise  oftener  than  once  a  month,— the  sales  we 
make  directly  from  our  store  being  entered  in  this  column,  as  well  as  the  net 
proceeds  of  sales  reported  by  the  persons  to  whom  we  ship.  The  object  of 
extending  the  cost  of  the  goods  in  the  Shipping  Ledger,  when  we  make  a 
shipment,  is  in  order  that  we  may  see  whether  we  lose  or  gain  on  the  ship- 
ment, and  thus  ascertain  whether  it  pays  to  ship  goods  to  that  person.  On 
the  debit  side  of  this  Ledger  is  found  the  cost  of  the  goods,  and  on  the  credit 
is  found  what  we  realized  for  them— the  difference  between  the  two  sides 
being  the  amount  lost  or  gained.  The  goods  charged  to  the  different  per- 
sons in  the  Shipping  Ledger  belong  to  us  until  reported  sold;  consequently,  a 
real  charge  is  not  made  to  the  person  until  the  sale  is  reported.  Some  ship- 
ping houses  keep  both  a  Sales   Hook  and  a  Shipping  Ledger,  entering  the 


THE  FOUNDATION. 


243 

TO 

246 


SHIPPING   BUSINESS.— Continued. 

shipment  first  on  the  Sales  Book  and  afterward  copying  it  into  the  Shipping- 
Ledger;  but  as  it  is  unnecessary  work  to  thus  enter  the  transaction  twice,  the 
Sales  Book  is  dispensed  with  and  the  transaction  is  at  once  recorded  in  the 
Shipping  Ledger.  There  are  several  forms  for  the  Shipping  Ledger  in  use; 
but,  as  heretofore  stated,  a  book  ruled  in  common  Ledger  form  may  be  used; 
however,  it  will  be  seen  that  two  extra  columns — one  on  the  debit  side  and 
one  on  the  credit,  in  which  to  make  a  memorandum  of  the  amount  lost  or 
the  amount  gained  on  the  shipments — are  very  convenient.  By  having  these 
two  extra  columns,  we  may  at  any  time  ascertain  how  much  we  have  gained 
or  lost  on  the  total  shipments  made  to  any  person,  by  simply  adding  the  two 
columns,  "Losses"  and  "Gains,"  on  his  shipment  account,  and  finding  the 
difference  between  the  sums  total.  In  order  that  the  book  described  may  be 
more  fully  understood,  a  form  for  the  same  will  here  be  given. 


243. 


FORM   FOR  SHIPPING  LEDGER. 


Shipments. 


i  Reported,    p 


244.  At  the  end  of  the  year  we  proceed  with  the  closing  of  our  books  in 
the  Shipping  Business  the  same  as  in  a  general  merchandise  business,  except- 
ing when  the  inventory  is  taken  the  goods  we  have  belonging  to  us  consist  of 
not  only  those  which  we  have  in  our  store,  but  also  those  which  we  have 
charged  to  the  different  parties  in  our  Shipping  Ledger,  and  which  have  not 
yet  been  reported  sold;  therefore,  after  we  have  found  the  value  of  the 
goods  we  have  in  the  store,  we  must  go  through  our  Shipping  Ledger  and 
add  to  the  inventory  the  value  of  the  goods  there  found  still  unsold;  when 
we  have  done  this  our  inventory  is  complete  and  we  are  prepared  to  close  the 
Merchandise,  which  is  done  in  the  manner  described  in  /i. 

245.  Another  Method. — There  is  another  method  of  treating  shipments, 
which  is  very  little  in  use;  the  reason  for  its  not  being  in  use  will  be  readily 
understood  after  having  read  the  following  description  of  the  method:  Charge 
the  person  to  whom  we  ship  the  goods  a  certain  amount  which  we  think  will 
be  about  what  we  will  realize  for  the  sale  of  the  goods;  then,  when  this 
person  renders  to  us  an  Account-Sales  of  the  consignment,  debit  or  credit  his 
account  for  the  difference  between  the  amount  we  charged  him  when  we 
shipped  the  goods  and  the  amount  of  the  net  proceeds  as  shown  in  the 
Account-Sales.  If  the  net  proceeds  be  less  than  the  amount  we  had  charged 
to  him,  debit  Merchandise  and  credit  his  account  for  the  difference;  if  more, 
debit    his    account   and    credit   Merchandise  for  the  difference.     When   this 


41 


THE  FOUNDATION. 

SHIPPING  BUSINESS.— Continued. 

method  is  adopted,  the  person  to  whom  we  ship  the  goods  is  charged  at  the 
time  the  goods  are  shipped,  the  same  as  though  we  had  sold  him  the  goods 
"out  and  out;"  thus  an  actual  sale  is  recorded  in  the  books  when,  in  fact,  it  is 
only  an  anticipated  sale — hence,  a  false  statement.  According  to  this  method, 
when  a  shipping  merchant  is  financially  embarrassed,  and  wants,  for  the  satis- 
faction of  his  creditors,  to  make  a  "big  show^ing"  on  his  books,  if  so  disposed 
he  may  charge  the  goods,  when  shipped,  at  exorbitant  prices,  and  by  so 
doing  show  (on  consignments  not  yet  reported  sold)  large  amounts  owing  to 
him  by  parties  to  whom  he  has  sold  (?)  goods.  There  are,  of  course,  shipping 
merchants  who  are  not  financially  embarrassed,  who  have  no  desire  that  their 
books  should  represent  them  worth  more  than  they  really  are,  and  w-ho  do  not 
charge  the  goods  at  exorbitant  prices;  yet  they  keep  the  accounts  with  the 
persons  to  whom  they  ship  according  to  this  method.  But  to  any  reasonable 
mind  it  will  at  once  be  seen  that  an  untrue  statement  is  made  in  their  books; 
for  the  books  show,  in  these  accounts,  a  part  of  the  resources  of  the  firm  to 
be  personal  accounts  owing  to  them  which  should  in  reality  be  a  showing  of 
merchandise  belonging  to  the  firm. 

COMMISSION    BUSINESS. 

246.  That  business  in  which  we  engage  for  the  purpose  of  selling  goods 
belonging  to  others — forthe  selling  of  which  goods  we  are  to  charge  a  certain 
percentage  on  the  sales — is  called  "Commission  Business."  The  business  of  a 
commission  merchant  consists  in  disposing  of  the  goods  sent  to  him  by  a  ship- 
ping merchant;  hence,  in  a  strictly  commission  business  none  of  the  goods 
which  the  merchant  has  in  his  store  belong  to  him;  therefore  he  can  have  no 
Merchandise  account  in  his  Ledger — the  accounts  representing  the  gains  in 
his  business  being  "Commission,"  "Stbrage,"  "Labor,"  etc.  The  books  used 
principally  in  this  business  are:  Receiving  Book,  Sales  Book  (by  some 
called  a  "Scratcher"),  Consignment  Book  (or  Consignment  Ledger),  Journal, 
Cash  Book  and  Ledger.  The  Journal,  Cash  Book  and  Ledger  are  of  the  same 
form  as  those  used  in  any  other  business.  The  use  of  the  Receiving  Book, 
the  Sales  Book  and  the  Consignment  Book  will  be  described  under  heading 
of  "Receipts."  It  will  be  seen  in  the  two  different  kinds  of  business,  Ship- 
ping and  Commission,  that  the  one  is  directly  the  opposite  from  the  other — 
the  shipping  merchant  being  constantly  sending  out  goods,  while  the  com- 
mission merchant  is  constantly  receiving.  Therefore,  while  the  Shipping 
Business  is  described  under  heading  of  "Shipments,"  it  is  thought  best  to 
describe  the  Commission  Business  under  heading  of  "Receipts." 

RECEIPTS. 

247.  The  Receiving  Book.— The  Receiving  Book  is  a  book  upon  which 
a  record  of  the  goods  received  to  be  sold  on  commission  is  first  made.  A 
common  Journal  ruling  is  suitable  for  this  book.    When  goods  are  received  to 

42 


THE   FOUNDATION. 

COMMISSION   BUSINESS.— Continued. 

be  sold  on  commission,  we  give  the  person  from  whom  wc  receive  the  goods 
a  consignment  number  on  this  bpok,  and  under  or  opposite  this  is  entered, 
first  the  date,  then  the  person's  name  and  address,  and  then  the  description 
of  articles  received;  after  which,  as  a  memorandum,  the  charges  paid  for 
freight,  drayage,  etc.,  together  with  the  name  of  the  Railroad  or  Steamboat 
Co.  from  whom  received.  As  soon  as  the  goods  are  received  we  stencil  on 
each  package  the  consignment  number  given  them  in  this  book,  and  they  are 
thereafter  known,  while  in  the  store  and  when  sales  are  made  from  them,  by 
that  consignment  number,  and  not  by  the  name  of  the  person  to  whom  they 
belong.  There  are  many  conveniences  which  arise  from  this  "consignment- 
number  method,"  a  few  of  which  being:  the  packages  are  marked  in  this 
manner  much  quicker  than  they  could  be  if  the  owner's  name  was  used 
instead;  when  any  of  the  goods  are  sold  it  is  much  the  quicker  way  to  write 
a  Consignment  No.  on  the  Sales  Book  than  to  write  the  owner's  name;  the 
salesman  may  not  know  to  whom  the  goods  belonged,  the  owner  being  simply 
identified  by  the  Consignment  No. 

248.  The  Sales  Book.— The  Sales  Book  is  a  small  book  (ruled  in  com- 
mon Journal  form)  used  in  which  to  record  the  on-account  sales.  When  a 
sale  is  made  d^  account,  the  person  to  whom  we  sell  is  charged  in  this  book 
in  the  same  manner  as  though  the  goods  belonged  to  us,  excepting  that  after 
having  recorded  the  time  upon  which  the  goods  were  sold  (30  days,  60  days, 
or  whatever  it  may  be),  we  add  the  Consignment  No.  to  which  they  belonged 
in  order  that  we  may  know  to  whom  the  sale  must  be  credited.  From  this 
book  a  sale  thus  recorded  is  posted  to  the  debit  of  the  person's  account  to 
whom  we  sold  the  goods  on  the  Ledger,  and  to  the  credit  of  the  owner  (the 
person  from  whom  we  received  the  goods)  on  the  Consignment  Book. 

249.  The  Consignment  Book. — The  Consignment  Book  is  a  book  in 
which  is  kept  the  progressive  sales  accounts  with  the  persons  from  whom  we 
receive  goods  to  be  sold  on  commission.  When  the  consignment  is  first 
received,  we  open  an  account  with  the  person  from  whom  we  receive  the 
goods  in  this  book,  entering  on  the  debit  side  first  the  date,  then  the  Consign- 
ment No.  given  by  the  Receiving  Book,  then  the  name  of  the  owner  of  the 
consignment,  and,  lastly,  the  number  and  description  of  the  articles.  The 
entry  made  thus  far  on  this  book  is  simply  a  memorandum  of  the  goods 
received  from  the  person,  and  as  such  it  ever  after  remains.  The  further  use 
of  this  book  is  described  as  follows,  viz.:  To  the  debit  side  is  posted,  from 
the  Cash  Book,  all  the  charges  wc  pay  on  the  consignment  for  freight,  dray- 
age, etc.;  and  to  the  credit  side  is  posted,  from  the  Cash  Book  and  the  Sales 
Book,  all  the  sales.  When  the  goods  belonging  to  a  consignment  luive  all 
been  sold,  we  enter  on  the  debit  side  of  the  Consignment  Book  all  of  our 
charges,  such  as  Insurance,  Storage,  Cooperage,  Labor,  Commission  or  what- 
ever they  may  be;  after  which,  we  find  the  difference  between  the  total  charges 
and  the  total  sales,  which  difference  is  the  net  proceeds.     We  then  close  up 

43 


248 

TO 

249 


250 


THE  FOUNDATION. 

COMMISSION   BUSINESS.— Continued. 

this  consignment  and  transfer  the  net  proceeds  to  the  Ledger,  which  is  done 
by  entering  on  the  Consignment  Book,  under  the  charges,  "To  Net  Proceeds" 
for  the  amount,  which  will  make  the  consignment  account  balance;  then,  by 
opening  an  account  in  the  Ledger  with  the  person  from  whom  we  received 
the  consignment,  and  crediting  this  account  for  the  net  proceeds— the  account 
here  opened  being  debited  when  we  make  remittance  for  same.  Our  charges 
for  commission,  etc.,  heretofore  referred  to,  may  be  at  once  entered  on  the 
Consignment  Book  and  posted  directly  from  this  book  to  the  credit  of  those 
accounts  on  the  Ledger.  As  soon  as  a  consignment  is  "closed  out,"  /.  e.,  the 
goods  all  sold,  an  Account-Sales  must  be  made  out  and  rendered  to  the  con- 
signor, which  Account-Sales  is  an  exact  copy  of  his  account  on  the  Consign- 
ment Book. 

The  person  who  ships  the  goods  is  called  the  consignor,  and  the  person  to 
whom  the  goods  are  consigned  or  shipped,  is  called  the  consignee. 

The  consignee  often  sells  on  time  unless  he  has  advice  from  the  consignor 
to  the  effect  that  he  must  sell  for  cash.  If  the  consignee  sells  on  time  it  is 
understood  that  he  (the  consignee)  takes  all  risks  in  collecting  the  account  ot 
the  person  to  whom  he  sells.  After  the  goods  in  a  consignment  have  all  been 
sold  and  an  Account-Sales  made  out,  if  there  were  any  time  sales  made  the 
Account-Sales  is  then  averaged,  the  date  found  upon  which  the  net  proceeds 
becomes  due,  and  a  note  sent  or  draft  accepted  for  the  amount. 

The  consignor  often  makes  sight  drafts  on  the  consignee  "in  round 
amounts,"  on  consignments  not  yet  entirely  sold  out;  these  drafts  are  paid 
by  the  consignee,  and  of  course  charged  to  his  account  in  the  Ledger. 

The  commission  merchant  often  receives  several  consignments  from  the 
same  person.  Although  but  one  account  is  opened  in  the  Ledger,  a  separate 
account  must  be  opened  for  each  consignment  in  the  Consignment  Book,  and 
each  consignment  has  a  different  number;  yet  each  of  these  Consignment 
Nos.  is  identified  as  belonging  to  the  same  person.  As  these  different  con- 
signments are  closed  out,  the  net  proceeds  of  each  are  carried  to  the  same 
account  in  the  Ledger.  The  reason  for  keeping  each  consignment  separate 
is,  because  the  consignor  wishes  to  know  upon  each  consignment  how  much  is 
lost  or  gained. 

250.  Closing  Commission  Books  at  the  End  of  the  Year.— Unlike 
any  other  business,  no  Merchandise  account  being  kept,  the  proceedings  for 
closing  the  books  in  the  commission  business  differ  only  in  this  one  particu- 
lar, viz.:  no  inventory  of  merchandise  is  taken,  for  the  reason  that  the  goods 
in  our  store  do  not  belong  to  us.  However,  an  inventory  is  made  of  the  store 
and  office  fixtures,  the  insurance  unexpired,  etc.,  after  which  a  Loss  &  Gain 
account  is  opened,  and  all  the  accounts  upon  which  wc  lose  or  gain  arc  closed 
and  carried  into  this  account  the  same  as  in  any  other  business.  At  the  end 
of  the  year  there  are  consignments  which  have  not  yet  been  entirely  sold  out, 
and   upon   which  there  are,  of  course,  gains  to  us  for  commission,  etc; — all 

44 


THE  FOUNDATION. 

COMMISSION  BUSINESS.— Continued. 

these  charges  thus  due  to  us  for  commission  on  sales  already  made,  insurance, 
storage,  etc.,  may  be,  at  the  end  of  the  year,  debited  to  the  consignments 
and  credited  to  the  different  accounts  representing  same.  But  this  way 
of  doing  necessitates  the  making  of  additional  charges  when  the  consign- 
ments are  closed  out;  therefore,  it  is  the  custom  to  allow  these  consignments 
to  remain  untouched  until  then,  for  the  reason  that  by  doing  otherwise  it 
makes  of  them  "complicated  affairs"  similar  to  that  described  under  "Interest 
Receivable,"  159. 

The  commission  merchant  usually  procures  an  insurance  policy  of  a  suffi- 
cient amount  "to  co\er  any  goods  he  may  at  any  time  have  in  his  store.' 
When  such  a  policy  is  procured,  he  opens  an  account  in  his  Ledger  and  styles 
it  "Insurance  Receivable,"  or  some  similar  title,  and  to  this  account  he  debits 
the  amount  paid  for  premium  on  that  policy.  This  is  called  a  resource;  for  to 
the  consignor  he  charges  a  certain  percentage  for  insurance,  according  to  the 
time  the  goods  remain  in  his  store,  this  Insurance  Receivable  account  receiv- 
ing credit  for  such  amount.  At  the  end  of  the  }-ear,  as  heretofore  stated,  the 
value  of  the  unexpired  premium  is  appro.ximated;  after  which  the  Insurance 
Receivable  account  is  closed  the  same  as  described  in  188.  There  are  some 
consignors  who  will  not  permit  us  to  charge  for  "Insurance;"  but  an  arrange- 
ment is  usually  resorted  to  by  the  consignee  through  which  he  can,  in  spite  of 
the  consignor's  protestations,  get  in  all  his  petty  charges,  such  as  insurance, 
"ratagc,"  risks  on  on-account  sales,  etc.,  by  charging  a  certain  percentage 
under  "Risks,"  "Charges,"  or  some  similar  title. 

251.  Trial  Balance. — In  taking  the  trial-balance  according  to  this 
method,  we  must  not  only  take  the  accounts  in  the  Ledger  and  the  cash  on 
hand  as  shown  by  the  Cash  Book;  but  also,  find  the  difference  between  the  two 
sides  of  all  the  unclosed  consignment  accounts  in  the  Consignment  Book,  and 
include  all  these  accounts  as  well  in  the  trial-balance. 

252.  There  are  several  different  methods  of  keeping  these  consignment 
accounts,  but  the  one  here  adopted  is  thought  to  be  the  best;  for  there  is  no 
method  by  which  the  work  can  be  lessened — less  writing  done,  less  entries 
made — unless  it  be  a  business  in  which  they  deal  mostly  in  petty  consign- 
ments, /.  e.,  small  consignments  which  they  usually  dispose  of  at  one  sale; 
then  the  system  and  form  described  in  256  and  257  is  recommended. 

253.  Another  IFct/ioil. — Proceed  according  to  method  described  in  247  to 
250  inclusive,  with  the  following  exceptions,  viz.:  1st. — When  goods  are 
received  and  charges  for  freight  and  drayage  paid,  instead  of  posting  these 
charges  directly  to  the  consignor's  account  in  the  Consignment  Book,  an 
extra  column  is  kept  in  the  Cash  Book  for  "Charges."  Into  this  column  are 
extended  all  such  charges,  and  at  the  end  of  the  day,  week  or  month,  when- 
ever the  Cash  Book  is  closed,  the  total  of  this  column  is  posted  to  the  debit 
side  of  a  "Charges"  account  in  the  Ledger— this  account  receiving  credit  for 
such  charges  when   the  consignments  are  closed  out,  as  will  be  hereinafter 

4.S 


251 

TO 

253 


253 


THE  FOUNDATION. 

COMMISSION   BUSINESS.— Continued. 

described.  The  difference  between  the  two  sides  of  this  account  always  shows 
the  amounts  owing  to  us  for  freight  and  cartage  charges  on  consignments  not 
yet  closed  out,  and,  therefore,  is  a  resource.  2d. — When  sales  are  made  from 
a  consignment  on  account,  in  addition  to  crediting  the  owner  on  the  Con- 
signment Book,  a  "Merchandise"  column  is  kept  in  the  Sales  Book,  and  all 
sales  are  extended  into  this  column;  at  the  end  of  each  month  the  total  of 
this  column  is  found,  and  that  amount  is  posted  to  the  credit  of  a  "Merchan- 
dise" account  in  the  Ledger.  An  extra  column  is  also  kept  on  the  debit  side 
of  the  Cash  Book  for  Merchandise,  in  which  to  extend  all  of  the  cash  sales  of 
the  consignments;  and,  as  in  the  Sales  Book,  in  addition  to  crediting  the 
consignments  for  such  sales,  the  amounts  of  each  are  extended  into  this 
column,  the  total  of  same  carried  forward  until  the  end  of  the  month,  and 
then  posted  to  the  credit  of  Merchandise  in  the  Ledger.  3d. — When  a  con- 
signment is  sold  out,  the  total  amount  of  the  sales  of  that  consignment  is 
posted  to  the  debit  of  the  Merchandise  account  in  the  Ledger;  then  all  the 
charges,  such  as  freight,  drayage,  labor,  commission,  etc.,  are  entered  on  the 
debit  side  of  the  Consignment  Book.  The  difference  between  the  total  of 
these  charges  and  the  total  sales  is  now  found,  and  that  difference,  being  the 
net  proceeds  of  the  sales,  is  posted  to  the  credit  of  the  consignor's  account  in 
the  Ledger;  after  which,  the  "Charges"  account  is  credited  for  the  freight  and 
drayage  charges,  and  each  of  our  gain  accounts,  such  as  Commission,  Labor, 
Storage,  etc.,  is  credited  for  the  amount  here  entered.  The  difference  between 
the  two  sides  of  the  Merchandise  account,  as  here  used,  is  a  liability, — being 
the  amount  we  owe  on  consignments  not  yet  closed  out.  At  the  end  of  each 
month,  when  we  take  a  trial-balance,  we  must  go  through  the  Consignment 
Book,  and  on  such  consignments  as  have  not  yet  been  closed  out,  find  the 
total  sales  of  each,  and  include  all  such  amounts  on  the  debit  side  of  the  trial 
balance — these  being  amounts  we  owe  to  consignors  for  goods  we  have  sold 
and  not  yet  rendered  Account-Sales  for,  but  which  have  been  credited  to 
Merchandise  in  the  Sales  Book.  The  total  of  these  amounts  thus  taken  from 
the  Commission  Book  should  just  agree  with  the  difference  between  the  two 
sides  of  the  Merchandise  account  in  the  Ledger. 

The  following  forms  will  illustrate  the  different  styles  of  rulings  used  by 
different  commission  merchants. 


46 


254 

TO 

256 


THE  FOUNDATION. 
COMMISSION    BUSINESS.— Continued. 


Consignment  Book. 


CON-SIGf-N-MENT. 


C.  B.  _, 

mL.  P(.  Charges: 

'  Freight. 

I  Drayage, 

j  Commission. 
j    Net  Proceeds, 


255. 


Consignment  Book. 


RECEIPTS. 


Freight. 

Cartage, 

Storage, 

Cooperage, 

Labor, 


256. 


Consignment  Book. 


PERSONAL,    DEBIT. 

CONSIGHSTMENT 

Date. 

To  Cash. 

C.  B. 

Folio. 

1 

Date. 

Cons't 
No. 

Owner,  Address  and  Articles. 

i 

Grass. 

1 

4S 


THE  FOUNDATION. 


254 

TO 

256 


FOKM   No.    I. 


Quantity.      |  Price. 


S.  B.  or  C.  B. 


Form  No.  2. 


1 

Articles. 

Price. 

1 

No.  of 

Description. 

S.  B.  or 
C.B.I>g. 

Form  No.  3. 


CREDIX. 

CONSIGNMENT  IJEBET.                                | 

''FrS^ 

Tare. 

Net 

Pric& 

Sales. 
Amount. 

Charges. 

Total 
Charges. 

Net 

Flight.       1 

Drayage. 

Sun4..       1 

Conunission. 

1 

1 

49 


THE  FOUNDATION. 

COMMISSION   BUSINESS.— Continued. 

257.  When  Form  No.  3,  above  shown,  is  used,  the  following  described 
method  is  adopted,  viz.:  The  books  are  kept  by  Single  Entry.  No  record  iS 
made  on  this  Consignment  Book  until  the  goods  belonging  to  a  consignment 
are  all  sold;  then  the  full  record  is  here  made,  consisting  of  the  date  upon 
which  the  consignment  was  closed  out,  the  Consignment  No.,  the  owner's 
name,  address,  and  articles  received,  with  weight,  price  realized,  and  the  total 
amount  for  which  sold,  which  amount  is  the  total  "Consignment  Credit." 
Then  the  charges  for  freight  and  Jrayage  ar(  transferred  from  the  Receiving 
Book  into  the  columns  here  representing  same,  and  otir  charges  are  made  in 
the  "Sundry"  and  "Commission"  columns;  the  total  charges  are  now  extended 
into  the  column  representing  same,  which  amount  is  the  total  "Consignment 
Debit."  The  difference  is  next  found  between  the  total  charges  and  the  total 
sales,  that  difference  is  extended  into  the  "Net  Proceeds"  column  to  the  per- 
sonal credit  of  the  consignor,  and  when  remittance  is  made  for  the  net 
proceeds  thus  credited,  the  consignor  is  debited  under  the  head  of  "Personal 
Debit."  So  this  book  is  at  once  a  Consignment  Book  and  a  Ledger  in  one; 
/.  e.,  instead  of  an  account  being  opened  with  the  consignor  in  the  Ledger,  his 
account  appears  here  in  the  "Personal  Debit"  and  "Personal  Credit"  columns. 
By  adopting  this  method  the  totals  of  our  "Sundry"  and  "Commission" 
columns  may  be  found,  at  the  end  of  each  month,  and  the  amounts  thus 
gained  posted  to  the  credit  of  those  accounts  in  the  general  Ledger.  When 
we  are  receiving  several  consignments  from  the  same  person,  a  page  may  be 
reserved  for  that  person  and  all  his  consignments  entered  thereon;  and  when- 
ever he  makes  drafts  on  us  "in  round  amounts"  on  his  consignment  account, 
he  is  charged  under  the  "Personal  Debit"  for  such  of  those  drafts  as  we  pay. 

258.  When  the  method  described  in  247  to  251  is  adopted,  either  of  the 
forms  254  or  255  may  be  used.  When  an  amount  is  posted  to  the  credit  side 
of  the  Consignment  Book,  the  Sales  Book  page  or  Cash  Book  page  upon 
which  may  be  found  the  original  entry  of  the  sale  is  here  inserted;  and  when 
an  amount  is  posted  to  the  debit  side  of  the  Consignment  Book,  the  Cash 
Book  page  upon  which  may  be  found  the  original  entry  for  the  freight-  and 
cartage  charges  is  inserted.  This  same  "folio"  column  is  used  in  which  to 
enter  the  Ledger  page  to  which  we  post  the  credits  for  our  charges  for  Com- 
mission, Insurance,  etc.;  arid  also  the  Ledger  page  to  which  is  posted  the  net 
proceeds, — it  being  thought  unnecessary  to  make  an  entry  on  any  other  book 
before  transferring  these  amounts  to  the  Ledger,  as  the  entry  is  perfectly 
clear  to  us  and  does  not  require  any  elaboration  by  way  of  a  "Journal  entry" 
before  going  into  the  Ledger. 

259.  It  will  be  seen,  in  Form  Ijlo.  i,  that  no  column  is  made  on  the  "Sales" 
side  in  which  to  write  the  description  of  the  articles — the  description  being 
already  given  under  "Consignment;"  thus  all  that  is  required  under  "Sales" 
is  simply  a  column  for  the  quantity  o^  the  articles  sold.  In  Form  No.  2  it  will 
be  seen  that  no  column  is  made  on  the  "Sales"  side  in  which  to  write  the 

5o 


THE   KOUXDATION. 

COMMISSION    BUSINESS.— Continued. 

name  of  the  person  to  whom  sold, — it  being  thought  of  no  concern  to  the  con- 
signor to  whom  we  s.ell  the  goods,  as  we  ourselves  take  all  risk  in  the  collec- 
tion of  the  accounts, — and,  further,  we  do  not  want  him  to  know  who  our 
customers  are.  An  improvement  might  be  made  on  both  forms  by  consoli- 
dating the  two— having  no  column  for  the  person  to  whom  sold,  and  having 
simply  a  column  for  the  quantity — not  the  full  description — of  the  articles; 
with  also  a  column  in  which  to  make  a  memorandum  of  goods  sold  on  time, 
as  shown  in  Form  No.  i. 

260.  Shipping  merchants  very  seldom  do  exclusively  a  shipping  business, 
but  carry  on,  in  connection  with  same,  a  merchandise,  and  sometimes  a  little 
commission  business. 

Commission  merchants  very  seldom  do  exclusively  a  commission  business, 
but,  in  connection  with  the  same,  buy  and  sell  goods  "out  and  out,"  and  occa- 
sionally do  a  little  shipping;  however,  this  fact  of  their  doing  "a  little  outside 
business,"  as  they  call  it,  they  do  not  advertise  to  the  persons  who  ship  them 
goods  to  be  sold  on  commission, — in  fact,  they  sometimes  crack.if  not  break,  the 
ninth  commandment,  when  asked  by  a  commission  customer  of  theirs  whether 
or  not  they  handle  any  goods  of  their  own.  The  person  who  is  shipping 
goods  to  be  sold  on  commission  prefers  to  not  send  the  goods  to  a  commission 
merchant  who  transacts  a  merchandise  business  and  handles  the  same  kind 
and  class  of  goods;  for  it  is  supposed  that  "human  nature"  will  assert  herself 
and  prompt  the  merchant  to  "push  the  sale  of  his  own  goods  in  preference  to 
all  others,"  and  thereby  delay  the  sale  of  the  commission  goods.  It  often 
occurs,  however,  that  the  commission  merchant  has  an  order  for  a  certain  kind 
of  goods  of  which  he  has  not  a  sufficient  quantity  remaining  in  a  consignment 
to  fill  the  order;  then,  to  satisfy  his  customer,  he  must  go  out  and  purchase  a 
sufficient  quantity  to  fill  the  order.  This  transaction  is,  of  course,  excusable, 
business-like  and  just. 

261.  When  the  different  kinds  of  business — Shipping,  Commission  and 
Merchandise — are  by  a  merchant  conducted  in  connection  with  each  other, 
the  shipping  business  must  have  its  "Shipping  Ledger,"  or  else  a  portion  of 
the  general  Ledger  be  reserved  for  that  purpose;  and  the  commission  busi- 
ness must  have  its  "Receiving"  and  "Consignment  Books."  Aside  from  these, 
the  same  set  of  books  maybe  used  for  all  the  different  kinds  of  business.  The 
Consignment  Book  is  by  some  called  a  "Sales  Book,"  but  it  should  not  be  so 
called.  m 


261 


51 


263 

TO 

270 


THE  FOUNDATION. 

ACCOUNTS  WITH  ATTORNEYS. 


262.  Debit  for  all  notes  and  ac- 
counts we  hand  to  them  for  collec- 
tion. 


263.  Credit  for  all  collections  by 
them  made  and  turned  over  to  us,  on 
such  accounts  and  notes  as  we  gave 
them  for  collection. 


264.  Explanation. — Whenever  we  give  or  send  an  account  or  a  note  to 
an  attorney  for  collection,  we  open  an  account  with  the  attorney  and  debit 
him  for  such  note  or  account;  then  credit  the  person's  account,  or  the  Bills 
Receivable  account  for  the  amount, — writing  on  the  credit  side  of  such  personal 
or  Bills  Receivable  account  the  name  of  the  attorney  to  whom  handed,  adding 
"Att'y"  after  his  name;  so  that  we  may  know,  when  we  refer  to  such  an  account 
and  see  that  it  balances,  that  it  is  not  balanced  by  payment,  but  by  being 
handed  to  an  attorney  for  collection.  At  the  end  of  the  year  we  require  such 
attorneys  to  make  a  statement  of  the  condition  and  probable  worth  of  all  such 
of  our  accounts  and  notes  as  they  have  in  their  hands,  and  we  adjust  the 
amounts  to  be  carried  therefrom  to  the  Lost  Accounts  &  Notes  account 
accordingly.  The  attorney's  account  is  not  balanced,  but  is  allowed  to  stand 
as  a  resource,  the  same  as  any  other  personal  account  owing  us. 


LOST  ACCOUNTS   &   NOTES. 


265.  Debit,  during  the  year,   for 

267.  Credit  for  amounts  that  are 

amounts  we  lose  on  accounts  and 

afterwards    paid    on    accounts   anJ 

notes  by  persons  going  into  bank- 

notes    which     we     had     heretofore 

ruptcy,    making    assignments,    etc., 

1  called     worthless    and    debited    to 

etc. 

this    account. 

266.  Debit,  at  the  end  of  the  year, 

for  approximated  loss  on  worthless 

and    part-worthless    accounts    and 
notes. 

268.  Closing. — This  account  is  closed  the  same  as  "Salaries"  account. 
(See  202.) 

269.  E.XPLANATION. — This  account  is  kept  in  order  to  show,  at  the  end 
of  the  year,  how  much  we  have  lost  during  the  year  in  poor  accounts  and 
notes.  During  the  year  we  debit  this  account  for  all  absolute  losses  on 
accounts  and  notes. 

270.  Accounts. — At  the  end  of  the  year,  before  closing  our  books,  we 
take  the  Ledger,  and  beginning  with  the  first  account  therem,  go  through 
the  entire  book,  carefully  examining  evcrj'  account.     It  is  wrong  to  take  in 

52 


THE   FOUNDATION. 


LOST   ACCOUNTS   &   NOTES.— Continued. 


271 

TO 

272 


the  trial-balance  at  the  end  of  the  year,  as  Resources,  such  accounts  as  we 
know  to  be  absolutely  worthless,  and  such  accounts  for  their  full  face  as  we 
know  to  be  worth  only  a  small  per  cent,  on  the  dollar;  therefore,  when  we 
come  to  an  account  we  consider  entirely  -cvorthless,  we  credit  that  account,  in 
red  ink,  "By  Lost  Accounts  &  Notes"  for  the  entire  amount,  balance  the 
account  thus  closed  and  carry  the  amount  to  the  debit  side  of  "Lost  Accounts 
&  Notes  account," — writing  on  the  debit  side  of  that  account  the  name  of  the 
person  upon  whom  the  amount  was  lost.  Such  accounts  as  we  think  not 
entirely  worthless  we  estimate  the  value  of,  credit  same,  in  red  ink,  "By  Lost 
Accounts  &  Notes"  for  amount  considered  worthless,  and  carry  such  amounts 
over  to  the  debit  side  of  Lost  Accounts  &  Notes  account.  The  accounts  in 
the  hands  of  attorneys  are  treated  in  the  same  manner. 

271.  Notes. — Having  thus  disposed  of  the  accounts  in  the  Ledger,  we 
take  the  notes  on  hand  (Bills  Receivable)  and  examine  them  closely.  If 
we  find  any  we  know  to  be  worthless,  we  debit  Lost  Accounts  &  Notes 
account,  and,  in  red  ink,  credit  Bills  Receivable  account  for  such  amounts, — 
putting  all  such  notes  in  an  envelope,  on  which  we  mark  "Worthless  Notes." 
If  we  find  a  note  which  we  think  is  not  worth  its  full  face,  we  approximate 
the  value  thereof,  and  for  the  amount  considered  worthless  we  debit  Lost 
Accounts  &  Notes  account,  and,  in  red  ink,  credit  Bills  Receivable  account; 
after  which  we  may  write  on  a  slip  of  paper,  "$ thrown  off  as  worth- 
less," with  date,  pin  the  slip  on  the  note  and  put  it  with  the  notes  considered 
good. 

272.  When  wc  thus,  at  the  end  of  the  year,  carry  losses  on  accounts  and 
notes  to  this  account,  we  do  not  transfer  the  amounts  direct,  as  might  be 
inferred  by  reading  thus  far;  but  we  first  make  a  journal  entry,  with  complete 
explanation  accompanying,  so  that  if  we  ever  were  obliged  to  take  our  books 
into  court  to  prove  these  accounts,  they  would  in  this  entry  show  what  these 
credits  were.  The  journal  entry  here  referred  to  may  be  made  in  something 
of  this  manner:  First,  write  the  date  at  the  top  of  the  page,  then  below 
this  write,  "The  following  amounts  on  accounts  and  notes  are  this  day  by  us 
considered  worthless,  and  are,  in  consequence,  here  charged  to  Lost  Accounts 
&  Notes  account."  Under  this  heading  make  the  journal  entry  thus:  "Lost 
Accounts  &  Notes  Dr.  to  Sundries;"  after  which,  first  enter  the  names  and 
amounts  of  all  personal  accounts  called  worthless;  then,  the  amounts  called 
lost  on  accounts  and  notes  in  the  hands  of  attorneys — entering  first  the  attor- 
neys'names;  then,  as  an  explanation,  the  names  of  the  persons  upon  whom  the 
accounts  or  notes  arc  lost;  then  the  amounts  called  lost  on  our  Bills  Receiva- 
ble— writing  first  "Bills  Receivable,"  then,  as  an  explanation,  the  names  of 
the  makers  of  the  notes,  with  date  and  time  upon  which  the  notes  arc  drawn. 
We  now  find  the  sum  total  of  all  these  doubtful  accounts  and  notes  thus 
sacrificed,  and  enter  the  same  in  the  debit  column  on  the  same  line  with 
"I  ost    Accounts   &    Notes   Dr.    to   Sundries;"   after  which,  we   open   a   Lost 

53 


273 

TO 

274 


THE   FOUNDATION. 

LOST   ACCOUNTS   &    NOTES.— Continued. 

Accounts  &  Notes  account  in  the  Ledger,  and,  in  black  ink,  either  post  to  the 
debit  side  of  same  the  total  amount  thus  lost  in  one  entry,  or  copy  from  the 
Journal  each  name  and  amount.  The  latter  is  recommended  as  the  better 
way,  as  we  often  have  to  refer  to  this  account,  and  it  is  better  to  have  in  the 
Ledger  an  itemized  record  of  the  amounts  lost  on  accounts  and  notes.  After 
having  thus  posted  the  debit,  we  proceed  to  credit  each  of  the  accounts  here 
specified,  upon  which  these  amounts  were  lost.  We  credit  the  accounts  in 
red  ink,  so  that  such  entries  may  be  more  conspicuous;  otherwise,  in  passing 
our  eyes  hastily  over  such  accounts,  we  might  think  these  amounts  were 
payments.  We  may  write  on  these  accounts,  as  explanation,  either  "By  Lost 
Accounts  &  Notes,"  or  "Called  Lost."  It  sometimes  occurs  that  we  carry  an 
account  along  for  several  years,  throwing  off  little  by  little  at  the  end  of  each 
year,  until  finally  "Patience  ceases  to  be  a  virtue,"  and  we  "throw  it  all  to  the 
dogs." 

373.  P.WMENTS. — If  a  part  of  any  of  the  accounts  or  notes  which  we  had 
called  entirely  worthless  should  ever  thereafter  be  paid,  we  credit  the  Lost 
Accounts  &  Notes  account  for  such  payments.  When  payments  are  made  on 
any  of  the  accounts  or  notes  we  called  only  part  worthless,  we  first  credit  the 
personal  account  or  Bills  Receivable,  whichever  it  may  be,  until  the  amount 
which  we  called  good  is  all  paid,  and  afterwards  we  credit  the  payments  to 
the  Lost  Accounts  &  Notes  account.  A  memorandum  may  also  be  made  in 
lead  pencil  on  the  accounts,  for  payments  on  those  which  were  by  us  called 
worthless. 

274.  This  account  is  finally  closed  and  carried  into  Loss  &  Gain  account, 
the  same  as  any  other  upon  which  we  lose. 

Most  business  houses  call  this  account  "Suspense,"  but  the  title  here  used 
is  thought  to  be  more  expressive.  Some  houses  balance  all  the  doubtful 
accounts,  whether  worthless  or  only  part  worthless,  and  carry  the  total 
amounts  of  such  to  the  Suspense  account;  afterward  debiting  Loss  &  Gain 
and  crediting  Suspense  for  an  approximated  per  cent,  of  the  total  amount 
thus  carried  to  Suspense,  and  calling  the  balance  of  the  Suspense  a  resource, 
or  the  amount  thought  by  them  collectible.  Some  of  the  smaller  business 
houses  carry  the  amounts  lost  on  poor  accounts  and  notes  direct  to  the  Loss 
&  Gain  account.  The  system  herein  recommended  is  thought  to  be  better 
than  either  of  these,  for  the  reason  that  the  amounts  we  know  to  be  entirely 
worthless,  we  at  once  call  so  and  make  an  entry  accordingly;  and  of  those 
accounts  we  think  to  be  only  part  worthless,  we  carry  amount  thought  worth- 
less to  an  account  representing  the  loss,  and  allow  the  amount  called  good  to 
remain  in  the  original  account;  thus,  instead  of  "flooding"  our  Loss  &  Gain 
account  by  carrsing  each  of  these  accounts  therein,  we  simpjy  carry  to  the 
account  the  grand  total  of  such  loss. 


54 


275 


THE    I'OUNDATION. 


LOSS   &  GAIN. 


275.  Debit,  at  the  end  of  the  year, 
for  all  accounts  upon  which  we  have 
lost  during  the  year — writing  here,  in 
black  ink,  the  names  of  the  accounts 
upon  which  such  losses  were  sus- 
tained, and  the  amounts. 


276.  Credit,  at  the  end  of  the  year, 

for  all  accounts  upon  which  we  have 
gained  during  the  year — writing 
here,  in  black  ink,  the  names  of 
the  accounts  upon  which  such  gains 
were  made,  and  the  amounts. 


277.  Directions  for  closing  the  Loss  &■  Gain  account  at  the  end  of  the  year: 
a.— After  all  the  accounts  upon  which  losses  and  gains  have  been  made 

are  transferred  as  directed  in  275  and  276,  then  find  the  difference  between 
the  two  sides  of  this  account. 

278.  Closing  No.  i.— If  the  credit  side  be  the  larger,  the  amount  the 
credit  exceeds  the  debit  is  the  net  gain  for  the  firm,  or  the  net  business  gain. 
We  then  divide  this  gain  among  the  proprietors,  pro  rata  or  equally,  accord- 
ing to  agreement  at  commencement  of  business,  and  write  on  the  debit  side 
of  this  account,  in  red  ink,  the  names  of  each  of  said  proprietors,— adding 
"Private  account"  after  each,  and  extending  into  the  money  column  the 
respective  shares  of  the  net  gain.  This  having  been  done,  the  account  will 
balance. 

279.  If  the  debit  side  be  the  larger,  the  amount  the  debit  exceeds  the 
credit  is  the  net  loss  for  the  firm,  or  the  7iet  business  loss.  We  then  divide 
this  loss  among  the  proprietors  pro  rata  or  equally,  according  to  agreement 
at  commencement  of  business,  and  write  on  the  credit  side  of  this  account,  in 
red  ink,  the  names  of  each  of  said  proprietors — adding,  after  each,  "Private 
account,"  and  extending  into  the  money  column  their  respective  shares  of  the 
net  loss.     This  account  will  then  balance. 

280.  Closing  No.  2.— The  same  as  Closing  No.  i  in  every  particular  except- 
ing one — that  of  adding  "Stock  account"  after  the  names  instead  of  "Private 
account." 

b. — Rule   the   closing   lines  and  write   the   total  amounts   between  these 
lines. 

281.  c. — Closing  No.  i. — If  there  be  a  net  business  gain,  carry  over  to  the 
credit  sides  of  the  res^e^cUve  Private  accounts  of  each  member  of  the  firm,  the 
respective  shares  of  such  gain  (as  indicated  in  red  ink  on  the  debit  side  of 
this  account)— writing  on  the  credit  sides  of  these  Private  accounts,  in  black 
ink,  "By  J4  Net  Gain,"  or  whatever  the  proportion  may  be.     (See  61.) 

282.  If  a  7tet  business  loss,  carry  over  to  the  debit  sides  of  the  respective 
Private  accounts  of  each  member  of  the  firm  the  respective  shares  of  such 
loss  (as  indicated  in  red  ink  on  the  credit  side  of  this  account) — writing  on 
the  debit  side  of  these  Private  accounts,  in  black  ink,  "To  Yi  Net  Loss,"  or 
whatever  the  proportion  may  be.     (See  60.) 


283 

TO 

290 


THE   FOUNDATION. 

LOSS   &  GAIN.— Continued. 

283.  Closing  No.  2. — If  there  be  a  net  business  gain,  the  respective  shares 
of  such  gain  are  carried  direct  to  the  credit  sides  of  the  respective  Stock 
accounts  of  the  members  of  the  firm,  instead  of  to  the  Private  accounts,  as  in 
Closing  No.  I.     (See  54.) 

284.  If  a  net  business  loss,  the  respective  shares  of  such  loss  are  carried 
direct  to  the  debit  sides  of  the  respective  Stock  accounts  of  the  members  of 
the  firm  instead  of  to  the  Private  accounts,  as  in  Closing  No.  i.     (See  53.) 

285.  The  difference  between  Closing  No.  i  and  Closing  No.  2  is  as  fol- 
lows: In  the  former  we  carry  from  the  Private  accounts  the  net  private  loss 
or  gain  to  the  respective  Stock  accounts;  in  the  latter,  we  first  carry  the  net 
business  loss  or  gain  from  the  Loss  &  Gain  account  to  the  respective  Stock 
accounts,  and  then  we  carry  to  the  same  (Stock)  accounts  the  amount  by  each 
drawn  out  for  private  use,  as  shown  by  the  Private  accounts. 

286.  Single  Proprietor. — If  there  be  but  a  single  proprietor  in  the  busi- 
ness, instead  of  carrying  the  net  business  loss  or  gain  to  his  Private  account, 
the  Private  account  may  be  closed  and  carried  over  to  the  debit  side  of  Loss 
&  Gain  account  with  the  other  accounts  upon  which  he  loses,  then  the  Loss 
&  Gain  account  closed  and  his  net  private  loss  or  gain,  as  shown  by  this 
account,  carried  to  his  Stock  account.  Otherwise,  the  account  may  be  closed 
as  described  in  277  to  285. 

287.  Explanation. — Loss  &  Gain  account,  or  Profit  &  Loss,  as  it  is 
sometimes  called,  is  an  account  kept  to  show  the  final  summing  up  of  all  our 
losses  and  gains  during  the  year.  Some  business  houses  make  several  entries 
to  this  account  during  the  year,  but  it  is  the  better  way  to  carry  the  losses 
and  gains  into  other  accounts  until  the  end  of  the  year,  and  then  to  carry 
these  accounts  into  the  Loss  &  Gain  account.  (See  275  and  276.)  A  business 
man  wants  to  know  as  often  as  once  in  twelve  rrvonths,  and  sometimes  oftener, 
how  much  he  has  gained  or  lost  in  his  business.  In  order  to  ascertain  this,  it 
becomes  necessary,  first  to  take  an  inventory  and  then  to  "close  the  books." 

288.  If  the  books  are  closed  semi-annually,  or  oftener,  the  phrase  "at  the 
end  of  the  year,"  heretofore  used,  applies  to  the  time  the  books  are  closed, 
regardless  of  the  actual  end  of  the  year. 


THE   END   OF  THE  YEAR. 

Directions  for  Clo.sing  the  Books.— 

289.  First. — Take  an  inventory  of  all  the  merchandise,  store  and  office 
fixtures,  real  estate,  buildings,  unexpired  insurance,  unexpired  taxes,  etc., 
etc.  Then  close  all  these  accounts  as  per  instructions  on  each.  (See  71,  95, 
100,  106,  185,  188  and  200.) 

290.  Second— Sa.CY\fiCc  all  the  worthless  and  partly  worthless  accounts 
and  notes  as  per  instructions  in  270  and  271. 

56 


THE   FOUNDATION. 


THE   END   OF  THE  YEAR.— Continued. 


291 

TO 

296 


291.  Third — Close  all  accounts  in  the  Ledger  upon  which  losses  or  gains 
have  been  made,  and  transfer  such  losses  and  gains  to  the  Loss  &  Gain 
account.  (See  275  and  276.)  For  full  instructions  read  paragraphs  15  to  19, 
inclusive.  A  beginner,  in  closing  books,  frequently  closes  and  carries  over 
to  the  Loss  &  Gain  account,  accounts  that  he  should  not,  and  does  not  close 
and  carry  to  that  account,  accounts  that  he  should;  but,  if  he  will  thoroughly 
read  paragraphs  15  to  19,  and  follow  the  instructions  found  therein,  he  will 
experience  no  difficulty  in  this  line.  We  allow  the  Lost  Accounts  &  Notes 
account  to  stand  until  the  last,  and  finally  close  that  account  also  and  carry  it 
into  the  Loss  &  Gain  account. 

292.  In  closing  the  books  at  the  end  of  the  year  7iothing  must  be  left  in 
the  Ledger  but  Resources  and  Liabilities ;  and  nothing  must  be  carried  into  the 
Loss  &  Gain  account  but  Losses  and  Gains.  (See  Ledger  under  "The  Corner 
Stone.") 

293.  Fourth. — Having  thus  carried  over  to  the  Loss  &  Gain  account  all 
the  accounts  upon  which  we  have  lost  or  gained,  we  find  the  difference 
between  the  two  sides  of  this  account,  which  difference  is  either  our  tiet  busi- 
ness loss  or  our  net  business  gain, — we  then  dispose  of  that  loss  or  gain  accord- 
ing to  instructions  found  in  paragraphs  278  to  284. 

29-t.  When  a  transaction  is  posted,  the  same  amount  is  entered  in  the 
debit  side  of  the  Ledger  that  is  entered  in  the  credit  side  (see  28) — there- 
fore, if  no  mistakes  are  made,  the  two  sides  of  the  Ledger,  at  the  end  of  each 
month,  should  exactly  agree.  I  say  "at  the  end  of  each  month,"  because 
there  are  very  few  houses  who  do  not  reserve  the  debit  and  credit  to  Mer- 
chandise until  that  time,  and  then  post  the  total  for  the  month  in  one  entry 
to  that  account.  They  often  have  several  extra  columns  in  their  Cash  Books 
and  Journals  for  different  accounts,  which  necessitates  but  one  posting  per 
month  to  each  of  these  accounts;  then,  of  course,  the  Ledger  would  not  bal- 
ance until  all  these  totals  were  posted.  By  thus  having  these  extra  columns, 
double  entry  book-keeping  is  reduced  to  the  simplicity  of  single  entry,  with 
very  little  additional  labor. 

295.  When  we  close  an  account,  and  carry  the  amount  to  some  other 
account,  we  always  carry  the  amount  to  the  same  side  0/  the  Ledger  on  which 
it  was  before;  therefore,  the  Ledger  is  never  thrown  out  of  balance  by  the 
closing  of  an  account.  For  example:  If  the  rtViJ/Vside  of  the  Expense  account 
be  the  larger,  we  close  this  account  and  carry  the  amount  to  the  debit  side  of 
Loss  &  Gain  account;  if  the  credit  side  of  Interest  account  be  the  larger, 
we  close  this  account  and  carry  the  amount  to  the  credit  side  of  Loss  &  Gain 
account. 


295* 

AND  THE   FOUNDATION. 

2951 

ELIMINATION. 

2951^.  Any  abbreviation  is,  of  course,  a  violation  of  the  set  rules  of 
orthography.  Such  violation,  however,  may  be  pardonable  in  cases  of  emer- 
gency or  necessity. 

We  frequently  have  occasion  to  make  memoranda,  and  sometimes  to  take 
•lotes,  or  "jot  down"  what  another  person  says.  Whenever  such  is  the  case, 
the  following  mode  of  abbreviation  will  be  found  of  great  service,  inasmuch  , 
as  it  will  enable  us  to  write  with  a  much  greater  degree  of  rapidity,  and  con- 
sequently to  accomplish  our  work,  and  complete  what  we  have  to  write,  in  a 
correspondingly  short  space  of  time.  Rule :  Omit  vowels  and  silent  conso- 
nants. Example,  the  above:  "Ny  abrvtn  s,  f  crs,  a  vltn  f  th  st  rls  f 
orthgrphy.     Sch  vltn,  hwvr,  m  b  prdnbl  n  ess  f  emrgncy  r  ncssty. 

W  frqntly  hv  occsn  t  mk  mmrnda,  nd  smtms  t  tk  nts,  r  'jt  dwn'  wht 
anthr  prsn  ss.  Whnvr  sch  s  th  cse,  th  fiwng  mde  f  abrvtn  wl  b  fnd  f  grt 
srvc,  insmch  s  t  wl  enbl  s  t  wrt  w  a  mch  grtr  dgre  f  rpdty,  nd  cnsqntly 
t  accmplsh  r  wrk,  nd  cmplt  wht  w  hv  t  wrt,  n  a  crspndgly  shrt  spc  f  tm." 

It  will  be  seen  that  sometimes  one  consonant,  or  one  combination  of  con- 
sonants, will  stand  for  several  words,  as,  for  instance:  "t" — it,  at,  to;  "s" — is, 
as;  "f" — if,  of,  off;  "w" — we,  with;  "nd" — and,  need  ;  "fnd" — find,  found. 
The  words  preceding  these  consonants  help  to  determine  which  words  the 
consonants  stand  for,  consequently  no  difficulty  is  experienced  in  reading  the 
words  thus  abbreviated. 

Not  only  is  there  a  saving  of  time  in  the  omission  of  letters,  but  also  in 
the  dotting  of  "i's";  each  of  the  latter  being  fully  equal  to  the  making  of  a 
letter.  To  show  that  this  is  not  an  insignificant  i-tem,  it  is  onl\'  necessary 
to  add  that  in  the  original  of  the  above  example  there  are  t\vent\-nine  i's, 
while  in  the  illustration  there  is  but  07ie  i. 

After  a  person  has  become  familiar  with  this  mode  of  abbreviation,  he  can 
better  appreciate  its  value.  The  same  can  also  be  used  in  either  business  or 
private  correspondence  between  any  two  persons  who  each  possess  a  copy 
of  this  book  and  have  carefully  read  this  article.  Nearly  the  same  rule  is 
observed  in  this  st\  le  of  writing  as  is  observed  in  advanced  phonography  or 
short-hand,  namely,  that  of  omitting  vowels  and  silent  consonants.  Therefore, 
it  will  be  seen  that  the  principle  upon  which  this  mode  of  abbreviation  is 
based  is  a  practical  one. 

CALENDAR. 

295f.  On  a  calendar  where  the  figures  are  large,  instead  of  erasing  the 
same  with  a  pencil  as  the  days  pass,  do  as  follows  :  cut  several  square  pieces 
of  paper  to  about  the  size  of  the  squares  in  which  the  figures  representing  the 
days  of  the  month  are  printed;  then,  each  morning,  take  one  of  these  pieces 
of  paper,  and,  after  putting  a  little  mucilage  on  it,  paste  it  over  the  date  just 
passed.  This  not  only  more  effectually  and  neatly  covers  up  the  tracks  of 
the  past,  but  with  more  precision  and  dispatch  directs  the  eye  to  the  present 
date. 


296 

298 


Double  Entry  Book-Keeping. 


THE  TRIAL  BALAN'CE. 

296.  The  Trial  Balance— the  joy  and  delight  (?)  of  every  book-keeper! 
There  is  no  rule  or  combination  of  rules  with  which  a  book-keeper  can  at 
once  locate  an  error  in  his  trial-balance.  I  wish  there  was,  and  that  I  were 
the  sole  possessor  of  that  rule; — every  book-keeper  would  then  agree  with  me 
in  this  one  fact;  that  I  had,  in  the  possession  of  that  rule,  an  independent  for- 
tu7ie;  for  no  book-keeper  would  be  without  it,  even  at  a  cost  of  $iO.  How- 
ever, it  may  be  well  to  give  here  a  few  hints  with  regard  to  finding  errors. 

297.  In  Round  Numbers. — If  the  difference  be  in  round  numbers,  as  $I0, 
$iOO  or  $iooo,  the  error  may  have  been  made  in  addition  or  subtraction. 

If  Divisible  by  9.— If  the  difference  be  divisible  by  9,  the  error  may  have 
been  made  in  the  transposition  of  figures. 

If  Divisible  by  2. — if  the  difference  be  divisible  by  2,  the  error  may  have 
been  made  by  posting  an  item  representing  just  one-half  the  difference  to  the 
wrong  side  of  the  Ledger. 

Aside  from  the  above  three,  there  may  be  "a  thousand  and  one"  rules 
with  which  to  detect  errors  in  Trial  Balances,  but  they  are  all  of  no  practical 
use;  for  if  the  book-keeper,  after  having  applied  them  all,  still  does  not  find 
the  error,  he  is  obliged  finally  to  resort  to  the  simple  method  of  "checking 
off;"  and  he  then  realizes  that  all  the  time  spent  on  those  "rules"  was  time 
thrown  away;  so  it  is  better  to  proceed  at  once  with  the 

COMMON-SENSE   METHOD   OF   DETECTING   ERRORS. 

298.  1st. — See  whether  or  not  the  balance  of  cash  on  hand,  as  shown  by 
the  Cash  Book,  is  taken  in  the  Trial  Balance. 

2d.— See  whether  or  not,  on  the  Cash  Book,  Journal  and  such  other  books 
as  you  post  from,  every  debit  and  credit  is  checked  as  having  been  posted  to 
the  Ledger;  i.  e.,  see  whether  or  not  for  every  debit,  a  credit  has  been  made 
for  a  like  amount,  and  for  every  credit  a  debit. 

3d.— See  whether  or  not  any  mistakes  have  been  made  in  addition,  or  in 
carrying  forward  the  totals  on  the  Trial  Balance. 

4th.— Take  the  Ledger,  and  from  the  beginning  of  the  same,  examine  the 
addition  and  subtraction  of  every  account,  and  if  there  be  any  accounts  which 
have  been  balanced  and  carried  forward  to  a  new  page,  see  whether  the  cor- 

-   59 


20'.t 


DOUBLE  ENTRY   BOOKKEEPING. 

rect  amount  has  oeen  transferred;  and  finally,  see  whether  or  not  the  proper 
amount  is  entered  in  the  proper  column  on  the  Trial  Balance. 

5th. — See  whether  or  not  any  mistakes  have  been  made  in  addition,  or  in 
carrying  forward  the  totals  on  the  Journal. 

6th  and  last. — Examine  the  posting  for  the  entire  month  from  the  begin 
ning,— seeing  whether  or  not  the  proper  amounts  have  been  posted  to  the 
proper  side  of  the  Ledger.  In  thus  examining  the  posting,  it  is  well  to  check 
off  in  the  Ledger,  with  a  hard  lead  pencil,  the  items  as  soon  as  found  to  be 
correct. 

If  the  error  is  not  found  after  the  foregoing  "program"  has  been  exhausted, 
there  is  no  other  recourse  but  to  go  over  it  again  and  again  until  the  error  is 
found.  It  sometimes  occurs  that  a  book-keeper  will  pass  over  an  error  several 
times  before  discovering  it. 

299.  The  Trial  Balance  is  simply  a  copy  of  the  accounts  in  the  Ledger. 
If  the  debit  side  of  an  account  be  the  larger,  find  the  difference  between  the 
two  sides  and  enter  it  in  the  left  hand  or  debit  column  on  the  Trial  Balance; 
and  if  the  credit  side  of  an  account  be  the  larger,  find  the  difference  between 
the  two  sides  and  enter  it  in  the  right  hand  or  credit  column  on  the  Trial 
Balance.  As  the  Trial  Balance  is  neither  more  nor  less  than  merely  a  copy 
of  the  Ledger,  in  the  debit  column  there  must  be  nothing  but  Resources  and 
Losses,  and  in  the  credit  column  nothing  but  Liabilities  and  Gains.  (See  41 
and  42.) 

300.  The  monthly  Trial  Balance  is  taken  simply  to  ascertain  whether  or 
not  the  books  balance;  therefore,  all  that  is  necessary  at  the  end  of  each 
month  prior  to  the  time  when  the  books  are  closed,  will  be  merely  to  take  the 
figures  to  the  Trial  Balance,  since  it  is  a  waste  of  time  to  write  the  names  of 
all  the  accounts.  (See  808  for  this  form.)  Some  business  men  require  the 
book-keeper  to  write  on  the  Trial  Balance  the  names  of  all  the  accounts  as 
well  as  the  amounts,  believing  that  by  so  doing  the  book-keeper  cannot  con- 
ceal any  ."ways  that  are  dark  and  tricks  that  are  vain;"  but  this  is  a  great 
mistake,  for  \i  a  book-keeper  is  disposed  to  be  "crooked,"  the  most  complete 
Trial  Balance  that  ever  was  made  would  never  exhibit  the  "crookedness." 

301.  At  the  end  of  the  year,  before  the  books  are  closed,  the  book-keeper 
ascertains  whether  his  books  balance  by  taking  a  Trial  Balance  in  figures;  and 
after  the  books  have  been  closed  he  takes  a  Trial  Balance,  writing  the  names 
of  all  the  accounts,  as  well  as  the  amounts.  So  a  Trial  Balance  consisting  of 
the  names,  as  well  as  the  amounts,  is  made  only  immediately  after  the  books 
have  been  closed.  (See  810  for  this  form.)  There  are  many  houses,  however, 
that  require  such  a  Trial  Balance  at  the  end  of  every  month. 

302.  In  adding  the  money  columns  in  the  Ledger,  write  the  totals  in 
small  figures  in  lead  pencil,  close  under  the  last  amount  in  the  column;  by  so 
doing  it  is  never  necessary  at  the  end  of  each  month  to  add  back  of  these 
amounts,  but  simply  to  add  the  entries  for  the  month,  including  the  lead 
pencil  totals,  which  amounts  to  the  same  as  it  would  by  adding  the  entire 
column   from  the  top.     After  the  two  columns  have  thus  been  added,  simply 

60 


DOUBLE   ENTRY   BOOK-KEEPING. 

subtract  from  one  side  to  the  other  the  lesser  amount  of  these  totals  from  the 
greater,  and  enter  the  difference  in  the  explanation,  or  wide  column,  on  the 
side  upon  which  is  the  greater  amount,  which  difference  we  transfer  to  the 
Trial  Balance.  (See  694  and  701.)  This  difference  is  entered  in  the  explana- 
tion column  simply  as  a  memorandum  showiiig  the  amount  carried  to  the  Trial 
Balance.  Business  colleges  have  in  their  Trial  Balances  two  columns  in 
which  they  enter  the  debit  and  credit  total  aviounts,  and  two  columns  in 
which  they  enter  the  debit  and  credit  differences,  which  makes  a  double  Trial 
Balance,  hence  unnecessary  work.  For  these  additions  and  subtractions  in 
the  Ledger  I  would  recommend  a  "Faber  IIHHII  Drawing"  pencil,  as  it  is 
hard  and  makes  a  neat,  clean  mark. 

:t03.  After  the  Trial  Balance  has  been  completed,  a  statement  may  be 
made  in  the  firm's  private  record  book,  consisting  of  the  present  Assets  and 
Liabilities;  the  Losses  and  Gains  for  the  year;  each  member's  private  gain  or 
loss  for  the  year,  and  his  present  worth;  together  with  the  percentage  of  the 
gross  gain,  as  well  as  the  net  gain,  to  the  sales  for  the  year.  (See  812  to  818.) 
This  kind  of  a  statement  is  much  more  satisfactory  to  the  business  man  than 
the  elaborate  "chromo"  gotten  up  by  business  colleges  and  called  by  them  a 
"Balance  Sheet." 

304.  Past-Due  Accounts.— To  all  firms  doing  only  a  moderate  busi- 
ness, that  do  not  draw  for  or  settle  by  note  their  customers'  accounts  when 
due,  the  author  would  suggest  that  the  book-keeper  prepare,  on  the  first  of 
every  month  when  he  takes  his  Trial  Balance,  a  list  of  the  accounts  that  are 
long  past  due — entering,  with  the  person's  name  and  the  amount  he  owes,  the 
number  of  months  that  this  account  averages  over  due.  Would  recommend 
a  book  ruled  in  Journal  form  and  labeled  "Past-Due  Accounts,"  for  this  use. 
This  book  or  list  he  submits  to  the  firm  for  examination,  when  they  decide 
what  disposition  shall  be  made  of  the  accounts.  By  so  doing  an  account  can- 
not stand  several  months  past  due  in  the  Ledger  without  the  knowledge  of 
the  firm;  for  it  is  brought  before  them  every  month,  and  many  accounts  may 
be  saved  that  otherwise  might  be  lost.  It  is  not  necessary  for  the  book- 
keeper to  ascertain  the  exact  average,  but  simply  to  look  over  the  accounts 
and  approximate  the  average. 


303 


RED  INK  PROMISES. 

305.  The  red  ink  entries  that  are  made  in  the  Ledger,  will,  in  this  work, 
be  styled,  "Red  Ink  Promises,"  the  reason  for  which  will  be  clearly  percepti- 
ble to  the  pupil  after  having  read  this  article.  Beginners  in  the  practice  of 
book-keeping  frequently  close  an  account  in  red  ink,  and  neglect  to  bring 
down  or  carry  forward  the  balance;  and  for  such  persons  this  article  is  pre- 
pared. With  the  single  exception  in  par.  270  and  271,  red  ink  entries  are  never 
made  in   the  Ledger  except  when  we  wish  to  balance  an  account  and  bring 


300 

Tl) 

308 


DOUBLE   ENTRY   BOOK-KEEPING. 

down  below  the  closing  lines  or  carryforward  to  a  new  page  the  amount  for  a 
new  account;  or,  to  carry  the  amount  to  some  other  account, — or  both,  as  is 
the  case  with  the  closing  of  the  Merchandise  account  at  the  end  of  the  year. 
Therefore,  when  we  balance  an  account  with  a  red  ink  entry,  we  promise 
that  account  that  after  having  ruled  the  closing  lines,  we  will  dispose  of  its 
value  as  indicated  in  the  red  ink  entry,  in  one  or  more  of  the  following  ways: 

1st. — If  the  red  ink  entry  be  "By  Inventory,"  we  promise  the  account  that 
we  will,  after  having  closed  it,  bring  down  on  the  debit  side  below  the  closing 
lines  the  value  of  that  inventory. 

2d. — If  the  red  ink  entry  be  "By  Loss  &  Gain"  or  "To  Loss  &  Gain,"  we 
promise  the  account  upon  which  we  write  this,  that  we  will  transfer  to  the 
Loss  &  Gain  account  the  amount  here  indicated  as  lost  or  gained. 

3d. — If  the  red  ink  entry  be  "By  Private  account"  or  "Stock  account,"  or 
"To  Private  account"  or  "Stock  account,"  we  promise  the  Loss  &  Gain  account 
that  we  will  transfer  the  net  gain  or  loss  to  that  account. 

4th. — If  the  red  ink  entry  be  "By  Balance"  or  "To  Balance,"  we  promise 
the  account  that  we  will,  after  having  ruled  the  closing  lines,  either  bring 
down  below  these  closing  lines,  or  carry  forward  to  a  new  page,  the  difference 
between  the  two  sides  of  the  account,  as  indicated  in  the  red  ink  entry. 

306.  Having  closed  an  account  with  a  red  ink  entry,  we  always  carry  for- 
ward or  bring  down  the  amount  directly  to  the  opposite  side  of  the  Ledger 
from  that  upon  which  the  red  ink  entry  was  made. 

307.  If  these  red  ink  promises  are  at  all  times  fulfilled,  the  balance  of  the 
Ledger  will  never  be  affected  by  a  red  ink  entry.  On  the  other  hand,  any 
failure  on  our  part  to  fulfill  any  of  these  promises  insures  for  us  a  punishment 
when  we  take  our  Trial  Balance  at  the  end  of  the  month;  for  we  may  then  be 
obliged  to  spend  several  hours  in  finding  the  account  against  which  we  "com- 
mitted the  offense." 

308.  Balancing  an  Account. — When  an  account  has  filled  a  page  and  we 
wish  to  transfer  it  to  a  new  page,  we  simply  find  the  difference  between  the 
two  sides  and  close  the  account  as  follows: 

Credit. — If  the  credit  side  be  the  larger,  write  on  the  debit  side,  in  red  ink, 
"To  Balance,"  for  the  sum  of  the  difference,  which  will  make  the  account 
balance;  then  rule  the  closing  lines  and  write  the  total  footings  between  the 
lines;  after  which,  open  a  new  page  for  the  account,  and  write  on  the  credit 
side  of  that  account,  in  black  ink,  "By  Balance"  for  the  balance  brought  for- 
ward— writing  on  the  old  the  page  to,  and  on  the  new  the  page  from  which 
the  account  is  transferred. 

Debit. — If  the  debit  side  be  the  larger,  write  on  the  credit  side,  in  red  ink, 
"By  Balance"  for  the  sum  of  the  difference,  which  will  make  the  account 
balance;  then  rule  the  closing  lines  and  write  the  total  footings  between  the 
lines;  after  which,  open  a  new  account  and  write  on  the  debit  side  of  that 
account,  in  black  ink,  "To  Balance"  for  the  balance  brought  forward— writing 
on  the  old  the  page  to,  and  on  the  new  the  page  from  which  the  account  is 
transferred. 


DOUBLE  ENTRY  BOOK  KEEPING. 


ON  FILING  BILLS. 


309 

TO 

311 


a09.  When  you  enter  your  invoices  only  two  or  three  times  a  month,  the 
author  would  recommend. the  following  described  method  of  filing  them  as 
the  most  economical,  simple,  and  very  best;  because  an  invoice  may  be  found 
in  this  way  sooner  than  in  most  any  other.  First  arrange  the  bills  in  alpha- 
betical order,  according  to  firm  names;  then  each  firms  bills  in  order  of  date; 
then  enter  them  on  the  Journal  under  the  Journal  entry  heading  "Mdse.  Dr.  to 
Sundries;"  then  get  an  "Emerson's  File  and  Binder,"  letter  size,  or  one  similar, 
place  a  piece  of  heavy  paper  on  the  bottom  about  the  size  of  a  large  sheet  of 
letter-paper,  after  which  file  the  bills— the  last  letter  in  the  alphabet  first,  and 
so  on  until  you  have  them  all  in  the  file;  then  file  another  piece  of  heavy  paper  ' 
on  the  top,  after  which  the  volume  may  be  taken  from  the  file,  and,  after 
fastening,  labeled  in  the  following  described  way:  First,  "Invoices,"  then  the 
month  and  year,  and  lastly  the  Journal  No.  and  Journal  page  upon  which  these 
bills  were  entered.  For  example:  Invoices- March,  1879— A.— 124  and  125. 
Now,  when  these  bills  are  posted  to  the  Ledger,  and  we  want  to  find  a  certain 
bill,  we  refer  to  the  credit  side  of  the  firm's  account  in  the  Ledger  and  find 
the  Journal  page  upon  which  the  bill  was  entered;  then  look  for  the  file  of 
bills  which  has  on  it  this  Journal  page,  when,  as  they  are  arranged  in  alpha- 
betical order,  the  bill  may  be  easily  found.  When  there  are  too  many  bills 
to  get  into  one  volume,  divide  and  bind  them  in  two  or  more  volumes;  but 
never  divide  a  page — divide  the  bills  according  to  the  Journal  pages,  and  not 
according  to  the  number  of  bills. 


ON  COPYING  LETTERS. 

310.  In  copying  letters  in  a  letter-book,  get  a  set  of  good,  clean  blotters, 
throwing  away  the  oil-board.  A  much  clearer  copy  can  be  made  by  using 
blotters,  and  the  copy  is  never  so  blurred  and  blotted  that  it  can  scarcely  be 
read,  as  is  often  the  case  when  oil-board  is  used.  Use  the  blotters  in  the 
same  manner  as  you  used  the  oil-board. 


DIRECTIONS  FOR  OPENING  A  SET  OF  DOUBLE  ENTRY  BOOKS  FOR 
A  FIRM  JUST  STARTI?\G  IN  BUSINESS. 

311.  In  opening  a  set  of  double  entry  books  for  a  firm  just  starting  in 
business,  a  statement  of  the  actual  assets  and  liabilities  by  each  member 
invested  should  be  made  before  an  entry  is  made  on  the  books.  Then  a  sepa- 
rate entry  should  be  made  in  the  Journal  for  each  member  of  the  firm  for  such 
investment.    When  two  or  more  persons  first  enter  into  a  copartnership  busi- 

6^, 


312 


DOUBLE   EXTRY   BOOK  KEEI'LVG. 

ness,  under  a  certain  firm  name,  the  individual  assets  by  each  invested  become 
the  firm's  assets;  and,  therefore,  the  assets  by  each  invested  are  debited  to  the 
firm's  accounts  representing  assets;— and  the  individual  liabilities  by  each 
invested  become  the  firms  liabilities;  therefore,  the  liabilities  by  each  invested 
are  credited  to  the  firm's  accounts  representing  liabilities;  then  the  firm 
becomes  indebted  to  each  member  of  the  firm  for  the  amount  that  the  indi- 
vidual assets  by  each  invested  exceed  the  individual  liabilities;  consequently, 
each  member  must  be  credited  for  the  difference  between  his  total  individual 
liabilities  and  his  total  individual  assets.  When  the  entries  have  been  made 
in  accordance  with  the  foregoing  remarks,  the  Ledger  will  balance  and  we 
may  proceed  according  to  the  rules  of  double  entry.  (See  49  and  56.)  For  a 
complete  illustration,  see  347^  to  369 


DIRECTIONS  FOR  CHANGING  A  SET  OF  BOOKS  FROM  SINGLE 
ENTRY  TO  DOUBLE  ENTRY. 

312.  The  proceedings  for  changing  a  set  of  books  from  single  entry  to 
double  entry  are  as  follows,  viz.: 

1st. — Take  an  inventory  of  all  the  merchandise,  store  and  office  fixtures, 
fuel,  real  estate,  buildings,  unexpired  insurance,  unexpired  taxes,  bank  or 
other  shares,  and  whatever  other  values  the  firm  may  have;  open  an  account 
in  the  Ledger  for  each,  and  debit  all  such  accounts  for  the  total  value  of  each 
as  represented  by  the  inventory. 

2d. — Open  a  Bills  Receivable  account  in  the  Ledger  and  enter  on  the  debit 
side  of  that  account  all  the  unpaid  notes  (that  we  call  good)  held  against 
others.  (See  107.)  If  the  parties  from  whom  we  received  these  notes  were 
not  credited  for  such  notes  at  the  time  they  gave  them  to  us,  they  should  be 
credited  when  the  Bills  Receivable  account  is  opened. 

3d. — Open  a  Bills  Payable  account  in  the  Ledger,  and  enter  on  the  credit  side 
of  that  account  all  the  unpaid  notes  we  have  outstanding,  made  by  us  payable 
to  other  parties.  (See  129.)  If  the  parties  to  whom  we  gave  these  notes 
were  not  charged  for  such  notes  at  the  time  they  were  by  us  given  to  them, 
they  should  be  charged  when  the  Bills  Payable  account  is  opened. 

4th.— Open  a  Cash  Book  and  enter  on  the  debit  side  the  total  amount  of 
cash  on  hand  and  in  the  bank;  then  proceed  with  this  book  according  to 
instructions  in  paragraphs  13  and  75  to  86. 

5th.— Open  such  accounts  in  the  Ledger  as  you  wish  to  keep  to  show  your 
expenses  during  the  year,  such  as  Expenses,  Salaries,  Advertising,  etc.,  etc. 
(See  194.) 

6th. — OjKMi  an  Interest  account  in  the  Ledger  and  use  it  according  to 
instructions  in  paragraphs  144  to  154. 

64 


DOUBLE   ENTRY   BOOKKEEPING. 

/th. — Now  find  the  actual  present  worth  of  the  firm  by  taking  a  Trial  Bal- 
ance, consisting  of  the  names  and  amounts  of  all  the  accounts  in  the  Ledger 
representing  resources  and  liabilities,  including  the  accounts  just  opened.  In 
the  single  entry  Ledger,  as  formerly  kept,  appear  all  the  personal  accounts 
owing  to,  and  by  the  firm — which  accounts  would  of  course  be  included  in  the 
Trial  Balance  as  a  part  of  the  firm's  assets  and  liabilities.  Having  thus  copied 
into  the  Trial  Balance  all  the  accounts  in  the  Ledger  representing  resources 
and  liabilities,  we  find  the  sums  total  of  the  two  columns,  and  the  amount  the 
debit  column  (representing  resources)  exceeds  the  credit  column  (representing 
liabilities)  is  the  net  present  worth  of  the  firni—\\\\\z\\  net  present  worth 
should  exactly  agree  with  the  sum  total  of  the  value  of  all  the  members' 
Stock  accounts. 

8th. — Having  made  the  sum  total  of  the  members'  Stock  accounts  agree 
with  the  sum  of  the  net  present  worth  of  the  firm,  the  Ledger  will  balance 
and  we  may  then  proceed  according  to  the  rules  of  double  entry. 

313.  Some  firms  adopt  a  system  of  book-keeping  which  is  neither  single 
nor  double  entry,  but  "betwixt  and  between."  It  is  single  entry  with  a  few 
conveniences  borrowed  from  double  entry.  For  example:  Many  keep  a  Cash 
Book,  an  Expense  account,  so  that  they  may  see  what  their  expenses  have 
been  during  the  year,  and  all  keep  Private  accounts  for  each  member  of  the 
firm,  which  they  treat  as  described  in  paragraphs  57  to  65. 

314.  It  is  quite  as  easy  to  ascertain  how  much  is  lost  or  gained  by  the 
firm  in  the  business  by  single  entry  as  by  double  entry.  In  single  entry  the 
business  man  knows  how  much  he  is  worth  at  the  beginning  of  the  jear,  and 
by  taking  an  account  of  all  his  resources  and  liabilities  at  the  end  of  the  year, 
he  may  ascertain  how  much  he  is  then  worth— the  difference  between  the 
amount  worth  at  the  beginning  of  the  year  and  the  amount  worth  at  the  end 
of  the  year  being  the  net  gain,  or  the  net  loss. 

315.  The  phrase  "at  commencement  of  business,"  used  throughout  "The 
Foundation,"  may  in  every  instance  be  applied  to  the  entries  made  in  chang- 
ing a  set  of  books  from  single  entry  to  double  entry. 


313 

TO 

316 


ON  TAKING  IX  A  NEW  PARTXF.R. 

316.  In  taking  a  new  partner  into  the  concern,  the  strictly  proper  way  to 
do  is  to  close  the  books  at  the  time  the  partner  is  received,  in  order  that  an 
exact  statement  of  the  present  condition  and  worth  of  the  firm  may  be 
attained;  a  Trial  Balance  exhibiting  the  same  may  be  made  and  submitted 
to  the  new  partner  for  inspection,  in  order  that  there  may  be  no  misunder- 
standings. When  this  is  done  the  Ledger  exhibits  nothing  on  its  face  excef)t- 
ing  those  accounts  which  are  either  Resources  or  Liabilities;  and  also  shows 
the  present  n^t  worth  of  each  of  the  old  partners.     The  new  partner  is  then 

65 


317 
3Y9 


DOUBLE   ENTRY   BOOK-KEEPING. 

credited  with  his  net  investment;  after  which,  the  gains  and  losses  of  the  new 
firm  are  shared  proportionately  according  to  mutual  agreement.  In  illustra- 
tion of  this  method  see  347i  to  369. 

317.  Some  firms,  in  taking  in  a  new  partner,  simply  take  an  inventory  and 
make  a  statement  of  the  actual  present  standing  of  the  old  firm;  not  closing 
the  books,  but  allowing  all  the  accounts  upon  which  losses  and  gains  have 
been  made  to  remain  open  until  the  end  of  the  year.  The  former  method  is 
the  better  one,  for  the  reason  that  there  can  afterwards  be  no  dispute  among 
the  partners  with  regard  to  the  relative  individual  standing  of  each  at  the 
time  of  the  commencement  of  business  under  the  new  copartnership. 


INVESTMENTS. 


318.  Investments  are  made  in  several  different  ways,  a  few  desciiptions  of 
which  are  here  given: 

1st. — The  partners  invest  equally,  and  share  equally  in  the  losses  and 
gains.  After  the  partners  first  enter  into  business  their  interests  in  the  firm 
are  constantly  changing,  so  at  the  end  of  the  first  year,  when  the  books  are 
closed,  there  may  be  a  wide  difference  between  the  then  present  worth  of 
each.  The  partners  who  have  the  larger  interest  in  the  business  sometimes 
require  those  who  have  the  smaller  to  pay  interest  to  them  on  the  surplus 
capital;  but  there  are  some  who  are  more  lenient  with  their  unfortunate  (but 
perhaps  extravagant)  co-workers,  and  do  not  require  them  to  pay  interest  on 
the  surplus. 

2d. — Capital  is  sometimes  invested  against  Experience, — the  partner 
investing  the  money  having  no  experience  in  the  business  in  which  he  enters, 
and  the  partner  having  the  experience  investing  no  money.  All  the  money 
invested  is  of  course  credited  to  the  party  who  invests  it,  the  party  who  has 
the  experience  sharing  a  certain  proportion  of  the  gains  or  losses  of  the  firm. 

3d. — Partners  sometimes  invest  unequally  and  share  the  gains  and  losses 
/>ro  rata,  according  to  investment. 

319.  4th.— Interest  on  Surplus  Capital. — Partners  sometimes  invest  une- 
qually and  share  the  gains  and  losses  equally, — the  partner  investing  the  lesser 
amount  paying  the  partner  investing  the  greater,  interest  on  his  surplus 
capital.  When  this  is  done  the  partner  who  has  the  lesser  amount  invested, 
pays  to  the  partner  who  has  the  greater  interest  on  only  one-half  of  the  dif- 
ference, for  the  reason  that  it  is  the  same  in  effect  as  borrowing  so  much 
money;  and  by  borrowing  an  amount  equal  to  one-half  the  surplus,  lessens 
the  investment  of  the  partner  who  has  the  greater  amount  invested  just  that 
amount,  and  increases  the  investment  of  the  partner  who  has  the  lesser 
amount  invested  the  same  amount,  so  that  they  then  have  an  equal  interest 
in  the  firm. 

66 


DOUBLE   ENTRY   BOOK  KEEPING. 


320 

32*1 


WHAT  A  BOOK-KBEPER  SHOULD  IK)  IN  TAKING  A  SET  OE  BOOKS 
EROM  ANOTHER  BOOK-KEEPER  TO  KEEP. 

320.  Ill  taking  a  set  of  books  from  another  book-keeper  to  keep,  you 
should  first  take  a  Trial  Balance  to  ascertain  whether  or  not  the  books  bal- 
ance. If  they  do  not,  the  proprietors  should  be  informed  of  the  fact,  and  that 
the)-  must  be  made  to  balance  before  proceeding.  The  next  thing  will  be  to 
look  over  the  index  to  the  Ledger  and  find  out  what  other  than  personal 
accounts  have  been  kept,  so  that  you  may  know  into  what  accounts  Expense 
has  been  divided;  for  in  some  houses  Expense  is  divided  into  several  accounts, 
such  as  Freight,  Insurance,  Advertising,  Salaries,  etc.,  etc.,  while  in  others  all 
expenses  are  entered  under  one  heading.  If  you  come  across  an  account  you 
never  saw  before,  and  which  is  peculiar  to  this  business  only,  you  must  ascer- 
tain for  what  that  account  is  used.  Examine  all  the  books  in  use,  in  order  to 
get  an  idea  of  the  system  practiced  prior  to  your  taking  charge  of  the  books 
— learning  all  you  can  from  this  system,  and  noting  the  points  where 
improvements  may  be  made.  After  this,  ask  for  the  notes  held  against  others 
(Bills  Receivable).  Look  over  these  notes  and  arrange  them  in  order  as  they 
become  due.  If  among  these  notes  there  are  any  having  indorsers,  you 
should  not  fail  to  present  them  to  the  makers  for  payment  before  three 
o'clock  P.  M.  on  the  day  they  fall  due;  and  if  not  paid  upon  presentation, 
to  have  them  protested  immediately  before  a  notary  public.  Failing  to  do 
this,  all  the  indorsers  are  released,  and  the  firm  may  look  only  to  the  makers 
for  payment,  and  if  they  be  not  able  to  pay,  the  notes  are  simply  worthless. 
In  some  States,  however,  it  is  not  necessary  to  have  notes  bearing  indorsers 
protested  in  order  to  hold  the  indorsers.  The  better  way  is  to  discount  notes 
in  the  bank  ten  or  fifteen  days  before  due;  then,  if  they  are  not  properly 
attended  to,  the  bank  is  responsible. 


UiNNECESSARY  WORK  TAUGHT  IN  THP:  BUSINESS  COLLEGES  AND 

PRACTICED  BY  MANY  EXPERIENCED  BOOK-KEI:PERS, 

AND  HOW  TO  AVOID  IT. 

3til.  In  many  business  colleges  students  are  taught  to  balance  the  Ledger 
accounts  every  month  and  bring  down  the  balances.  This  idea  is  absurd;  for 
in  some  business  houses,  where  they  have  several  thousand  accounts,  it  would 
require  a  month's  time  for  a  book-keeper  to  do  this  wholly  unnecessary  work. 
Excepting  at  the  end  of  the  year,  when  we  close  all  accounts  except  those 
which  represent  Resources  and  Liabilities,  we  never  close  an  account  "To 
Balance"  or  "By  Balance"  until  the  page  is  full  and  we  wish  to  transfer  the 
account  to  a  new  page  (see  308);   or,  unless  an  account  with  a  person  be  dis- 

67 


323 


DOUBLE   KNTRV    BOOK-KEEPING. 

continued,  and  then,  as  this  account  balances,  we  simply  rule  the  closing  lines 
and  enter  the  totals  between  these  lines. 

322.  It  is  also  unnecessary  work  to  rule  Ledger  headings,  although  the 
Ledger  looks  a  little  better  thereby,  and  it  might  be  done  when  the  book- 
keeper has  plenty  of  spare  time.  When  we  do  not  rule  Ledger  headings  for 
the  accounts  opened  below  the  top  ruling,  we  simply  write  the  name  of  the 
account  over  the  center  ruling  and  proceed  on  the  next  line  below  with  the 
entries.  Some  Ledgers  are  ruled  for  one,  two,  three  and  four  accounts  to  the 
page;  but  it  is  better  to  have  one  common  full-page  ruling  through  the  entire 
book,  since  by  so  doing  we  economize  in  Ledger  paper  and  have  all  the 
accounts  together.  When  we  open  an  account  we  must  calculate  about  how 
much  space  it  may  require,  and  allow  so  much  space  before  opening  another 
on  the  same  page.  Some  accounts  require  several  pages,  while  others  require 
but  a  few  lines. 

323.  Another  absurdity  that  business  colleges  practice  in  their  system  of 
book-keeping  is  this:  They  teach  students  to  write  opposite  each  amount 
posted  to  the  debit  side  of  the  Ledger,  the  name  of  the  account  which  is 
credited  for  that  amount,  as  an  explanation;  and  opposite  each  amount  postec' 
to  the  credit  side  of  the  Ledger,  the  name  of  the  account  which  is  debited  for 
that  amount,  as  an  explanation.  Think  of  the  time  it  must  require  to  fill  the 
two  explanation  columns  alone  in  the  Ledger!  When  we  sell  a  bill  of  goods 
we  always  either  give  the  person  a  bill,  or  enter  it  in  an  account  book  which 
he  carries  for  that  purpose;  so  that  when  we  render  to  him  a  statement  of 
his  account,  he  does  not  need  any  further  explanation  of  the  charge  than 
simply  the  dates  and  the  amounts.  When  he  makes  a  payment,  either  by 
cash  or  note,  he  takes  a  receipt  from  us, — so  what  further  explanation  does 
he  want  of  the  credits  than  simply  the  dates  and  amounts.'  On  the  debit 
side  of  our  customers'  accounts  in  the  Ledger  we  seldom  charge  anything 
else  than  Merchandise,  and  when  we  do  we  make  the  explanation  in  abbrevi- 
ation, thus:  "Frt.,"  instead  of  "To  Freight  and  Cartage;"  "Int.,"  instead  of 
"To  Interest,"  etc.,  etc.  On  the  credit  side  of  our  customers'  accounts,  when 
we  have  any  other  credit  than  Cash,  we  make  the  explanation  the  same  as  on 
the  debit  side,  in  abbreviation,  thus:  "M.,"  instead  of  "By  Merchandise;" 
"Note,  6o  ds.,"  instead  of  "By  Bills  Receivable,"  etc.,  etc.  On  the  debit  side 
of  our  creditors'  accounts  we  seldom  make  any  other  charge  than  Cash;  and, 
on  the  credit  side,  any  other  credit  than  Merchandise;  when  we  do  we  make 
the  explanation  in  abbreviation. 

We  very  rarely  need  any  further  explanation  in  the  Ledger  than  that 
which  we  have  explained  in  the  foregoing  lines;  but  if  we  do,  we  refer  to 
our  Journal,  which  requires  not  more  than  one-thousandth  part  of  the  time 
't  takes  to  write  out  all  the  explanations.  Instead,  therefore,  of  filling  the 
debit  and  credit  explanation  columns  in  the  Ledger,  we  leave  them  blank, — 
simply  entering  the  date.  Journal  or  Cash  Book  page  and  amount,  when  we 
post.  The  business  man,  or  thoroughly  practical  book-keeper,  has  no  time  to 
waste  by  writing  more  than  one  explanation  of  an  entry  in  his  books. 

68 


DOUBLE    ENTRY    BOOK-KEEl'ING. 

Experience  teaches  the  common-sense  book-keeper  how  to  economize 
work  on  his  books;  and  he  soon  learns  to  dispense  with  ail  unnecessary  labor. 
Old  "habits"  will  sometimes  cling  to  him  for  years,  but  he  finally  yields  to 
reason  and  casts  them  all  aside.  There  are,  however,  at  this  late  day,  a  great 
many  book-keepers  who  stubbornly  cling  to  their  "old  fogy  ideas,"  and  still 
continue  to  contribute  a  good  share  of  each  day's  work  to  the  filling  out  of 
the  two  explanation  columns  in  the  Ledger. 

324.  There  are  a  few  accounts  which  require  explanations  written  on 
them  for  checking  purposes,  etc.;  for  example:  the  Bills  Receivable  and  Bills 
Payable  accounts,  the  accounts  with  Attorneys,  the  Lost  Accounts  &  Notes 
account,  etc.,  etc. 

Some  book-keepers  write  the  numbers  of  the  months  instead  of  their  names 
in  the  Ledger  when  posting;  but  this  is  economizing  a  little  too  much,  as  the 
proprietor  might  say  to  the  book-keeper  that  he  did  not  wish,  when  looking 
over  an  account,  to  be  obliged  to  "count  up  on  his  fingers"  in  order  to  find 
the  name  of  the  month  indicated  in  figures. 

325.  More  Business  College  "Pretty  Pictures." — In  most  of  the  business 
colleges  the  pupils  are  taught,  when  posting,  to  indicate  in  the  checking 
columns  on  the  Cash  Book  and  Journal  the  Ledger  page  to  which  the  transac- 
tions are  posted  ifi  red  ink.  Now  this  will  do  very  well  for  play-work  in  a 
business  college;  but  if  put  in  practice  in  a  business  house  where  the  book- 
keeper posts  from  morning  until  night,  day  after  day,  at  the  end  of  a  week's 
time,  from  the  constant  changing  of  the  red  ink  and  black  ink  pens,  that  book- 
keeper's ear  would  be  like  a  piece  of  raw  beefsteak;  and  in  a  month's  time, 
even  in  this  little  "nonsense,"  he  would  have  hurled  several  golden  hours 
over  the  rocky  precipice  into  eternity. 

326.  "Dr.andCr." — The  "Fresh-men"  from  the  "play-houses"  write  "Dr.'* 
and  "Cr."  at  the  top  of  all  the  Ledger  pages.  The  business  man  who  has,  in 
intellect,  taken  but  one  step  in  advance  of  the  beast,  already  knows  that  the 
left-hand  side  of  the  Ledger  is  the  Debit,  and  the  right-hand  side  the  Credit,— 
if,  however,  there  should  be  one  so  unfortunate  as  not  to  be  the  possessor  of 
that  knowledge,  he  had  better  "not  sleep  another  wink"  until  he  has  ordered 
a  copy  of  "Goodwin's  Improved  Book-Keeping  and  Business  Manual,"  and 
read  paragraph  15,  which  paragraph  is  intended  for  the  edification  of  those 
"tender-shoots"  who  have  not  yet  aspired  to  the  title  "Business  Man." 

326  1-2.  The  foregoing  facts  being  known  to  every  business  man,  is  it  any 
wonder  that  "business  colleges  have  reached  such  popularity  (.')  among  these 
men.'  Business  (.')  College — golden  thought  to  the  "innocent!"  How  they 
flock  thither!  The  idea  of  passing  through  the  "Actual  Business  Depart- 
ment" of  a  real,  live  Business  College!  The  thought  of  such  a  thing  is  enough 
to  intoxicate  with  delight  the  young  aspirant  for  business.  The  "innocent" 
go  to  the  business  college,  enroll  their  names,  buy  a  stack  of  valuable  (.') 
books  and  stationery  (valuable,  if  measured  by  the  prices  required  to  pay), 
pass  through  and  throw  away,  in  all,  from  $300  to  $1,000  for  board,  tuition, 
etc.,  etc.     There  are  (it  is  hard  to  believe,  but  it  is  nevertheless  true)  some 

69 


324 

TO 

326 


327 

TO 

338 


DOUBLE   ENTRY   BOOK-KEEPING. 

business  colleges  who  have  the  presumptuous  "cheek"  to  guarantee  to  every 
"victim,"  when  he  enters,  a  situation,  just  as  soon  as  he  graduates  from  their 
institution.  Alas!  how  "crest-fallen"  is  that  poor  graduate  when  he  finally 
awakens  to  the  reality  that  the  promised  situation  is  at  the  desk  of  a  "castle 
in  the  air;"  and  when  he  goes  out  to  "battle  with  the  world,"  and  seek  for 
^imself  a  situation,  to  meet  a  friend  who  "puts  a  flea  in  his  ear"  by  whispering: 
"If  you  want  to  get  a  situation,  don't  cut  your  throat  by  telling  the  business 
man  that  you  are  a  graduate  from  a  business  college."  Of  course,  not  one  of 
the  business  colleges  in  existence  would  have  you  think,  for  an  instant,  that 
their  own  is  like  any  other;  but,  on  the  contrary,  they  will  at  once  give  you  to 
understand  that  they  have  made  marked  improvements  over  all  other  insti- 
tutions; and  that  theirs  is  now  recognized  and  acknowledged  as  the  very  best 
in  the  country.  To  prove  what  they  say  to  be  true,  they  invite  you  up  stairs 
and  ask  you  to  step  into  their  Palatial  Actual  Business  Department,  that  you 
may  see  for  yourself  They  say  they  know  business  colleges  in  general  are 
condemned  because  of  the  imposition  of  a  few  good-for-nothing  institutions. 
There  are,  of  course,  very  few  good-for-nothing  business  colleges  in  the 
United  States, — probably  not  more  than  one  tlioiisand,  while  the  good  ones 
are  as  plentiful  as  hen's  teeth. 

327.  Petty  Accounts.  —We  sometimes  sell  small  bills  of  goods  on  account 
to  city  customers — to  persons  who  seldom  buy  of  us  except  for  cash.  Not 
wishing  to  open  an  account  with  such  persons,  we  enter  all  such  names  under 
a  Ledger  heading  in  Uic  Ledger  called  "Petty  Accounts."  By  so  doing,  the 
account  takes  up  one  line  only.  These  accounts  need  not  be  indexed,  but 
instead  we  simply  index  "Petty  Accounts;"  and  anything-we  do  not  find  in 
the  index  we  will  understand  is  to  be  found  in  the  "Petty  Accounts."  We 
keep  these  Petty  Accounts  in  the  following  manner:  Under  this  title  in  the 
Ledger  we  post  the  entries  thus:  When  we  charge  a  per.son  we  make  the 
entry  on  the  debit  side  of  the  Ledger— writing  first  the  date,  next  the  per- 
son's name,  then  the  Journal  page,  then  the  amount.  When  he  pays  this 
account  we  write  on  the  same  line  on  the  credit  side  of  the  Ledger,  opposite 
his  name,  the  date,  page  and  amount.     (See  736  to  746.) 

328.  hidcx  Arrangement  of  the  Ledger  Accounts.— On  opening  a  new 
Ledger  in  a  wholesale  business,  it  proves  a  great  convenience  to  arrange  the 
accounts  alphabetically  according  to  the  towns— leaving,  after  each  town  or 
city,  a  few  blank  pages  for  the  new  customers  we  may  get,  or  the  extension 
of  the  old  accounts.  When  we  arrange  the  Ledger  in  this  way  it  greatly 
facilitates  posting,  since  we  write  the  name  of  the  city  or  town  on  the  outer 
margin  of  the  top  of  the  page,  and  by  knowing  the  town  in  which  the  cus- 
tomer resides  his  account  is  easily  found  without  referring  to  the  index.  An 
index  must  also  be  kept  in  order  that  we  may  use  it  to  find  a  name  when  we 
do  not  remember  the  town  in  which  the  person  resides.  Some  firms  index 
the  towns  and  not  the  persons'  names.  Should  we  ha\e  several  accounts  on 
one  page,  all  belonging  to  the  same  town,  we  need  only  write  the  name  on 
the  top  of  the  page. 

70 


DOUBLE    I'.MRV    ]!()OK  KKEPING. 

In  a  retail  business,  the  accounts  may  be  arranged  alphabetically,  accord- 
ing to  the  names  of  the  persons. 

329.  On  Committing  the  Pages  to  Memory.—Sorac  book-keepers  who 
possess  good  memories  comnnit  to  memory  the  account  pages  of  almost  the 
entire  Ledger.  In  order  that  the  pages  may  be  more  readily  committed  to 
memory,  and  that  an  account  may  be  much  more  quickly  found,  I  would 
recommend  the  following  system  for  an  index,  which  may  be  made  from  the 
index  proper:  Get  a  piece  of  heavy  white  cardboard,  and  from  the  index 
take  the  names  of  all  such  accounts  as  those  to  which  a  great  many  entries 
are  made  during  the  year,— beginning  with  "A"  in  the  index,  write  these 
names  in  a  bold,  plain  hand,  arranging  them  in  alphabetical  form  on  this  card- 
board. Write  the  names  of  the  accounts  in  ink,  and  afterwards  add  the  pages 
in  lead  pencil.  The  object  in  writing  the  pages  in  lead  pencil  is,  that  they 
may  be  easily  changed  when  the  accounts  are  transferred  to  new  pages. 
When  posting,  stand  this  card  on  the  desk  before  you,  and  you  will  soon 
become  so  familiar  with  the  location  of  the  names  that  you  can  instantly  \:)\&cq 
your  eye  upon  any  name  you  wish  and  learn  the  page  upon  which  the  account 
may  be  found. 

330.  Red  Checks.— Whan  a  page  is  filled  and  closed  up,  or  balanced,  in 
the  Ledger,  so  that  no  more  entries  can  be  made  on  it,  make  a  red  check  at 
the  top,  immediately  over  the  center  ruling  and  under  the  name,  to  indicate 
that  it  is  dead,  "buried  in  oblivion"— then,  in  taking  the  Trial  Balance  at  the 
end  of  each  month,  when  we  see  this  red  check  at  the  top  of  a  page  we  may 
pass  it  quickly  by  and  not  spend  any  time  in  examining  the  page  to  see 
whether  or  not  there  is  anything  to  be  carried  to  the  Trial  Balance.  Would 
recommend  the  use  of  this  red -check  system  to  indicate  completion  on  all 
books  such  as  Order  Books,  etc. 

331.  On  Entering  Invoices. — Among  the  smaller  business  houses  very  few 
enter  the  invoices  (bills  of  goods  they  buy)  oftener  than  twice  a  month;  and 
there  are  a  great  many  who  enter  theni  only  once  a  month.  When  these  bills 
are  received,  they  are  first  checked  to  indicate  that  the  goods  have  been 
received  in  good  order;  then  they  are  checked  by  the  buyer  to  indicate  that 
the  prices  are  correct;  after  which,  the  "figuring"  is  examined,  and  if  found  to 
be  correct  they  are  marked  "O.  K.;"  then  put  away  or  filed  in  a  safe  place 
until  the  middle  or  end  of  the  month,  when  they  are  entered  in  the  manner 
described  in  paragraph  309.     (See  also  74  and  401  to  407.) 

332.  On  Transferring  Charges  from  the  Sales  Books  or  the  Blotters  to  the 
Journal.— When  entries  are  transferred  from  the  Sales  Books  or  Blotters  to 
the  Journal  before  posting,  the  initials  as  well  as  the  "&  Co."  may  be  omitted 
when  there  is  but  one  person  by  that  surname  in  the  Ledger.  For  example: 
If  you  were  journalizing  an  entry  for  F.  B.  &  S.  M.  Hubbard,  and  you  had 
only  one  "Hubbard"  in  the  Ledger,  you  would  simply  write  "Hubbard"  in  the 
Journal,  with  the  amount  and  the  Sales  Book  or  Blotter  page;  or,  if  journaliz- 
ing an  entry  for  Scott,  Thompson  &  Co.,  and  you  had  no  other  "Scott"  in  the 
Ledger,  you  w^ould  simply  write  "Scott"  in  the  Journal,  and  omit  the  balance 


329 

TO 

332 


S82a 

TO  DOUBLE  ENTRY  BOOK-KEEPING. 

332d 

of  the  name.  The  object  of  so  doing  being  to  save  time  in  transferring  the 
entries  to  the  Journal ;  and  as  the  entries  are  (or  ought  to  be)  at  once  posted 
to  the  accounts  in  the  Ledger,  it  answers  the  same  purpose  as  though  they 
were  written  in  full. 

When  there  is  more  than  one  of  the  same  surname,  the  name  should,  of 
course,  be  written  in  full ;  or,  when  we  get  a  new  customer,  at  the  time  the 
first  entry  is  made  his  name  should  also  be  written  in  full,  together  with  his 
address. 

332a.  "P.  O.  Box."— When  adding  the  post-office  box-number  tr  a  super- 
scription on  an  envelope,  }-ou  may  omit  the  "P.  O."  usually  prefixed  to  the 
word  "Box,"  without  any  fear  that  the  post-master  of  the  town  to  which 
your  letter  is  addressed  will  drop  it  into  a  dry-goods  box. 

332b.  Posting. — It  is  now  quite  a  common  practice  among  book-keepers 
in  the  larger  houses  to  take  up  their  indexes  and  write  the  ledger-folios  in 
the  books  from  which  they  are  about  to  post  before  posting.  When  this  is 
done,  they  check  the  amounts  in  these  books  while  posting.     (See  1081.) 

332c.  Overdrafts. — When  the  bank  account  is  overdrawn,  the  amount  of 
the  overdraft  should  be  written  on  the  stub  of  the  check-book  in  red  ink, 
preceded  by  the  word  "Overdrawn."  That  amount  should  then  be  credited 
to  the  bank  in  the  Cash  Book,  for  it  then  becomes  as  truly  a  debt  as  any 
other  liability  that  we  have.  When  an  amount  sufficiently  large  to  cover,  or 
more  than  cover,  the  overdraft  is  deposited,  the  amount  of  the  overdraft  is 
then  charged  to  the  bank  in  the  Cash  Book,  thus  balancing  the  bank  account 
in  the  Ledger.  If  the  amount  thus  deposited  more  than  covers  the  amount 
of  the  overdraft,  the  latter  should  be  deducted  from  the  former  on  the  stub 
of  the  check-book  and  the  present  balance  on  deposit  shown  thereon  in 
black  ink. 

It  is  only  in  case  of  an  overdraft  that  a  bank  account  should  be  opened  in 
the  Ledger.     (See  86^.) 

THE  NUMERICAL  METHOD  OF  REFERENCE. 

332d.  In  no  way  can  a  reference  be  found  ?o  quickly  as  when  the  thing 
required  bears  a  number  and  is  arranged  in  its  numerical  order.  This  fact  is 
now  so  clearly  established  that  the  numerical  method  is  rapidly  coming  into 
use.  In  many  of  the  largest  houses  it  is  now  found  that  sales  are  numbered ; 
orders  are  numbered;  shipments  are  numbered;  consignments  are  num- 
bered; invoices  are  numbered  — and,  in  fact,  it  is  diflficult  to  find  anything 
which  is  not  numbered. 

When  invoices  are  numbered,  they  may  be  referred  to  in  the  Accounts 
Payable  book  (see  849)  by  their  numbers  only  — thus  saving  much  time  in 
the  writing  of  names,  dates,  etc. 

The  benefits  derived  from  this  method  of  reference  are  more  fully  treated 
elsewhere  in  this  book. 

72 


336 


The  Illustration  of  the  Foundation; 

Or,  The  Api)lication  of  the  Rules  found  in  the  Foundation. 


333.  Although  it  is  frequently  said  that  no  two  business  houses  keep 
their  books  exactly  alike,  yet  the  underlying  principles  which  govern  the  art 
of  book-keeping  are  the  same  in  all  systems;  therefore,  when  a  person  has 
thoroughly  mastered  book-keeping  in  one  branch  of  business,  he  is  sufficiently 
qualified  to  take  full  charge  of  a  set  of  books  in  any  other  business.  When  a 
business  man  asks  you  whether  or  not  you  have  had  any  experience  in  book- 
keeping, he  does  not  care  to  know  whether  or  not  you  have  ever  kept  books 
in  his  particular  branch  of  business;  but  simply  whether  you  have  had  expe- 
rience as  a  book-keeper.  He  does  not  expect,  neither  does  he  want  you  to 
plunge  headlong  into  the  work  without  first  looking  over  the  books,  in 
order  to  get  an  idea  of  the  system  he  has  been  using;  and  then,  unless  you 
can  suggest  some  improvements  which  are  at  once  recognized  by  him  as  such, 
he  expects  you  to  conform  to  his  ideas,  and  keep  the  books  according  to  the 
old  system. 

334.  The  business  here  chosen  to  illustrate  the  art  of  book-keeping,  is 
that  of  the  Retail  Grocery.  It  is  thought  this  business  affords  a  sufficient 
variety  of  transactions  to  fully  illustrate  the  points  set  forth  in  "The  Founda- 
tion." The  principles  of  double  entry  book-keeping  may  be  as  clearly  illus- 
trated with  a  small  business,  and  small  amounts,  as  with  an  extensive 
business,  and  large  amounts;  therefore,  it  is  thought  best  to  illustrate  here 
the  smaller  business,  and  the  less  cumbersome  figures.  In  order  to  see  the 
application  of  the  rules  in  "The  Foundation,"  the  paragraph  numbers  should 
be  referred  to,  whenever  given  throughout  "The  Illustration." 

335.  The  books  used  in  this  set  are:  Journal,  Cash  Book  and  Ledger 
Paragraph  Nos.  I2  to  2i,  inclusive,  should  now  be  read,  and  Nos.  26  to  48  be 
coMDiiilted  to  memory.  The  beginner  should  repeat,  immediately  before  mak- 
ing each  entry,  this  sentence:  "Debit  what  we  Receive,  and  Credit  what  we 
Give,"  and  then  make  the  entr)'  accordingly. 

336.  The  First  Half  of  the  Month  Here  Illustrated.— The  first  two  weeks, 
the  books  are  kept  without  Sales  Books, — all  the  sales  being  recorded  in  the 


337 

TO 

3^1 


THE  ILLUSTRATION. 

Journal.     The  employes  are  paid  their  wages  in  full  at  the  end  of  each  week, 
and  consequently  no  accounts  are  kept  with  them.     (See  203.) 

337.  The  Last  Half  of  the  Montli  Here  Illustrated. — The  last  two  weeks, 
two  Sales  Books  are  kept,  and  arc  numbered  "i"  and  "2," — the  on-account 
sales  are  transferred  from  these  books  to  the  Journal,  as  illustrated  in 
paragraph  Nos.  408  to  416.  In  business  the  sales  are,  of  course,  transferred 
to  the  Journal  daily.  (See  14.)  The  kind  of  Sales  Books  generally  used  in 
retail  stores  is  small  in  size — about  6x  12  inches  and  4  to  6  quires.  These 
books  usually  lie  on  the  counters  during  the  day,  when  sales  are  recorded  in 
them,  and  at  night  they  are  taken  by  the  book-keeper,  and  all  orders  which 
have  been  filled  and  not  marked  "Paid"  are  transferred  to  the  Journal  in  the 
manner  illustrated  in  paragraphs  408  to  416.  In  the  last  half  of  this  month 
the  employes  do  not  draw  their  wages  at  the  end  of  each  week,  but  an  account 
is  kept  with  each  employe,  which  is  charged  whenever  any  money  is  drawn, 
and  credited  at  the  end  of  the  month  for  the  salary  allowed.     (See  204.) 

338.  In  order  that  "The  Illustration"  may  be  thoroughly  understood,  an 
explanation  of  same  will  be  given  to  each  entry:  for  the  Journal  and  the 
Ledger,  on  the  opposite  page  from  "The  Illustration";  for  the  Cash  Book,  on 
the  pages  following  same.  The  "Ex."  prefixed  to  a  paragraph  number  sig- 
nifies, that  what  follows  is  an  explanation  of  that  which  follows  the  original 
paragraph  number. 

339.  The  object  in  having  the  Journal  ruled  in  the  form  here  shown, 
instead  of  having  the  columns  all  at  the  right  of  the  page,  is:  (i)  By  having 
the  debits  at  the  left  and  the  credits  at  the  right  of  the  entries,  the  book- 
keeper is  not  so  liable  to  post  an  item  to  the  wrong  side  of  the  Ledger. 
(2)  When  a  Journal  entry  is  made,  the  debit  and  credit  may  both  be  placed 
on  the  same  line,  and  thus  economize  in  paper  and  make  the  entries  more 
compact.     (3)  The  book  presents  a  better  appearance  in  being  thus  arranged. 

340.  A  Journal  ruled  in  the  common  form  maybe  used  for  this  system  by 
either  ruling  an  extra  money  column  on  the  debit  side  of  the  book  and  two 
L.  F.  (Ledger  Folio)  columns— one  on  the  left  side  and  one  on  the  right;  or, 
by  dispensing  with  the  "Mdse.  Dr."  column,  and  simply  ruling  the  two  "L. 
F."  columns;  then,  by  using  the  column  at  the  left  which  was  originally 
intended  for  the  date,  for  a  "Miscellaneous  Dr."  column,  writing  the  date  in 
the  center  of  the  page.  If  the  latter  method  is  adopted,  the  "Mdse."  debit 
items  must  be  entered  in  the  "Miscellaneous  Dr."  column  and  posted  to  the 
Merchandise  account  in  separate  entries,  the  same  as  other  debits  are  posted 
to  their  respective  accounts. 

341.  In  order  that  the  beginner  in  the  practice  of  book-keeping  may 
know  what  entry  to  make,  how  to  make  it,  and  what  explanation  to  write,  it 
is  thought  advisable  to  insert  here  an 


341 


THE    ILLUSTRATION. 


INDEX  TO  TRANSACTIONS. 


Accept  Time  Draft  drawn  on  us,  380-381. 
Accept  Time  Draft  drawn  on  us  by  a  creditor  in 

favor  of  a  third  party,  433-434. 
Borrow  money  and  give  note  therefor,  505. 
Buy  Bank  Shares,  517. 
Buy  Mdse.  and  pay  cash  therefor,  519. 
"         "      on  account,  401  to  407. 
"         "      and  give  note  therefor,  459  and  444. 
"         "      and  accept  time  draft  therefor,  403, 
380-381. 
Buy  Produce  from  farmer  for  cash,  519. 

"      on  account,  386. 
Buy  Store   and  Office   Fixtures,   and   pay  cash 

therefor,  511,  514,  etc. 
Buy  Store  and  Office   Fixtures,   and   give  note 

therefor,  390-391. 
Charge  Interest  on  an  account,  382-383. 
Charge  R.   R.   Co.   for  overcharge  on  Freight, 

393-394- 
Compromise  for  full  settlement  at  a  certain  per 

cent,  on  the  dollar,  500,  450  and  451. 
Discount  note  bearing  interest,  495  and  496. 

"  "     not  bearing  interest,  489  and  509. 

Draw  Sight  Draft  and   have  same  paid  by  the 

person  upon  whom  drawn,  492. 
Draw  Time  Draft  and  have  same  "accepted"  by 
the  person  upon  whom  drawn,  403,  380  and 
381. 
Enter  Mdse.  sales  from  Sales  Books,  40S  to  416. 
"      Employes'  salaries,  453  to  457. 
"      total  Mdse.  Dr.  and  Cr.  at  end  of  month, 
469  and  470. 
Give  Attorney  an  account  to  collect,  441-442. 

"  "        a  note  to  collect,  417-418. 

Give  a  person  a  check  on  account,  544. 

note         "  396-397. 

Give  a  creditor  an  order  on  a  debtor  for  goods, 

43 1 -432. 
Give  a  creditor  a  sight  draft  on  a  debtor,  439- 

440. 
Have  carpenter  work  done  on  store  fixtures,  399- 

400. 
Loan  money  and  receive  note  therefor,  542. 
Make  payment  on  our  note,  543. 


Md~e.  relumed  to  us  on  account,  376  to  378. 
Our  customer  discounts  bill  and  pays  cash,  497 

and  534. 
Pay  cash  for  Advertising,  526. 
Pay  our  Acceptance  (or  Time  Draft),  524. 
Pay  Bank  Collection  charges,  523. 
Partner  draws  money  for  private  use,  540. 
Pay  for  Exchange,  533. 

"       items  of  Expense,  507,  518,  etc. 
"       Insurance,  508. 
Partner  takes  Mdse.  for  private  use,  395. 
Pay  private  bill  for  partner,  541  and  546. 
Pay  Sight  Draft  drawn  on  us,  527. 
Receive  cash  on  account,  499  and  504. 
"       note  on  account,  373-374. 
"       a  payment  on  note,  488. 
"        a  check  on  account,  489^^. 
"       cash  for  overcharge  on  freight,  491. 
"       cash  for  interest  on  a  note,  494  and  496, 
Receive  cash  as  part  payment  on  a  note,  and 
have  balance  renewed  by  taking  a  new  note. 
493  and  Ex.  493. 
Receive  new  note  for  renewal  of  old  note,  inter- 
est and  balance  of  account,  421  to  425. 
Receive    from    commission    merchant    Account 

Sales  for  credit  of  our  customer,  419-420. 
Receive  new  note  for  renewal  of  old  note  and 

interest.  435  to  437. 
Receive  Mdse.  returned  from  our  customer,  376 

to  378. 
Return  Mdse.  to  person  from  whom  w-e  bought 

Sell  Mdse.  and  receive  cash  therefor,  486. 
"  on  account,  370  and  408  to  416. 

Sell  Mdse.    and  receive   note  therefor,    Lyman 

account  and  449. 
Send  Bank  Draft  on  account,  521. 
Send  Bank  Draft  for  our  nc 

and  532. 
Take  up  note  which  we  ha 

bank,  530. 
Time  Draft  we  draw  returned  to  us  "accepted" 

by  the  person  upon  whom  we  made  it,  388- 

389- 


mterest,  531 


the 


7-^ 


342 

TO 

384 


62. 


THE  ILLUSTRATION. 

JOURNAL. 

Chicago,  Ills.,  December  ist,  i88o. 


MdK. 

Mkcdl. 

L. 

L. 

Miscell. 

Mdse. 

Dr. 

Dr. 

F. 
844. 

F. 
345. 

Cr. 

Cr. 

34 

2. 

3 

3. 

34 

\ 

34 

7. 

»47M 

J.  H.  Goodwin  and  S.  A.  Emerson  have  this 

day  entered  into   copartner^liip   for   the  pur- 

pose of  transacting  a  Retail  Grocery  Business. 
The  style  of  the  firm  is  to   be   "Goodwin  & 

Emerson."    The   gains  and  losses  are   to   be 
shared  equally.     The  investments  are  as  fol- 

lows: 

« 

J.  H.  GOODWIN'S  INVESTMENT. 

348. 

500 

00 

C.B. 

Cash-Balance  on  hand. 

349. 

3376 

40 

40 

Mdse.  -On  hand,  per  Inventory. 

360. 

130 

41 

Store  and  Office  Fixtures,  per  Inventory. 

3U. 

42 

Expense-Coal  on  hand. 

362. 

304 

44 

G.  W.  Bennett. 

363. 

i6i 

Sam.  Hurto. 

364. 

84 

00 

44 

F.  H.  M.ller. 

366. 

187 

50 

44 

Frank  Richardson. 

360. 

00 

41 

Bills  Rec.-Note.  Ed.  Russell.  11-.8-80,  30  ds. 

367. 

loo 

41 

60  ds. 

868. 

869. 

240 

41 

'      A.  T.  Porter,  ii-2cv*3,3ods. 

860. 

00 

41 

S.  A.  Fisher,  10-12-80,  60  ds. 

Liabilities. 

861. 

Bills  Pay.— Ace.  Arbucl<le  Bros., 
11-13-80,  30  ds. 

^^ 

640 

00 

362. 

Bills  Pay.-Note,Thurber&  Co.. 
10-22-80,  60  ds. 

^^ 

500 

00 

363. 

Catlin  Tobacco  Co. 

45 

340 

40 

364. 

Samuel  Cupples  &  Co. 

45 

344 

363. 

Baker  &  Co 

45 

280 

366. 

J.  H.  Goodwin,  Stock  ace— AV/  invest- 
muni. 

S.  A.  EMERSON'S  INVESTMENT. 

40 

3500 

00 

867. 

Sundries  Dr.  to  S.  A.  Emerson,  Stock  acc't. 

40 

3500 

CO 

:t6s. 

C.B. 

Cash  -Balance  on  hand. 

369. 

1000 

00 

Bills  Rec— Note,  Hugo  Smith,  11-14-80, 3ods. 

370. 

4 

ro 

.44 

2. 

Ed.  Russell,                                                         Dr. 
5  lbs.  Rio  Coffee,  ioc.                                   i  00 

1  Ib.Y.H.  Tea.  70c.  8  lbs.  A  Sugar,  i.oo,  i  70 

2  cans  Peaches,  20c.                                          40 

371. 

I  gal.  Syrup,  75c,  I  Broom,  2sc,                 i  00 

4 

la 

■"-• 

" 

CO 

44 

Alex.  Dollus,                                                       Dr. 
4  bbls.  Apples.                                                3  00 

4- 
Bills  Receivable  Dr.  to  G.  W.  Bennett. 

CO 

373-3<4. 

200 

00 

^, 

^^ 

200 

00 

Rec'd  his  note  at  90  ds.  from  12-4-80. 

375. 

3 

55 

Alex.  Dollus.                                                   Dr. 

1  keg  Holland  Herrings,                             i  25 
.  sack  XX  Flour,                           .                .50 

2  doz.  Oranges.  40c,                                      80 

5- 

Mdse.  Dr.  to  Sundries. 

3 

S5 

376.           I 

45 

377. 

Ed.  Russell,  I  can  Peaches,  rct'd. 

44 

378. 

Alex.  Dollus,  .  keg  H.  Herrings,  ret'd. 

44 

' 

as 

379. 

5 

00 

46 

G.  W.  Borland  &  Co.,                                  Dr. 
5  kegs  Holland  Herrings,  spoiled.  ®      i  00 

5 

c. 

3$0-381. 

318 

60 

46 

8. 
Arbuckle  Bros.  Dr.  to  Bills  Payable, 
Ace.  their  D'ft  at  60  ds.  from  12-3-80. 

4« 

2 18 

60 

382.383. 

» 

50 

^^ 

Frank  Richardson                to                Interest, 
Int.  ODacc't.o  date. 

4a 

' 

JO 

384.           I 

45 

Mdse.  forward. 

2* 

55 

THE   EXPLANATION. 


Ex. 
342 


351 


EXPLANATION  OF  THE  JOURNAL- OPPOSITE  PAGE. 

THE   COLUMNS. 

Ex.  342  and  347. — These  are  the  columns  referred  to  in  paragraph  12.  In 
the  Mdse.  Dr.  column  is  entered  all  merchandise  bought  by  us  and  returned 
to  us;  and  in  the  Mdsc.  Cr.  column  is  entered  all  the  merchandise  sold  by  us, 
and  returned  by  us  to  other  parties.     (See  67  to  70.) 

Ex.  343  and  346. — These  are  the  columns  referred  to  in  paragraphs  39  and 
40.  All  debits  which  are  not  Mdse.  debits  are  entered  in  343  column;  and  all 
credits  which  are  not  Mdse.  credits  are  entered  in  the  346  column.  In  post- 
ing, ive  post  only  the  items  found  in  these  columns. 

Ex.  344  and  345. — These  are  the  columns  referred  to  in  325  and  340.  When 
we  have  posted  an  item  to  the  Ledger,  we  indicate  the  page  to  which  it  is 
posted  in  these  columns.  So  it  will  hereafter  be  understood  what  the  figures 
in  these  columns  indicate.  These  figures  also  show  the  book-keeper  where 
he  ended  his  posting. 

Ex.  3472- — In  order  that  the  beginner  may  be  prepared  to  "encounter" 
any  set  of  books  that  is  presented  to  him,  it  is  thought  best  to  give  here  a 
seemingly  complicated  example.  When  partners  first  enter  into  business, 
they  usually  invest  all  cash,  or  cash  and  note — tl^e  entry  then  is  a  very  simple 
one,  and  is  made  in  the  manner  represented  in  paragraphs  2>^7,  368  and  369; 
but,  when  one  of  the  partners  has  been  engaged  in  business  and  takes  in  a 
partner,  the  entry  then  is  more  difficult  and  complicated, — such  an  example 
is  here  presented.  Goodwin  has  been  engaged  in  the  Retail  Grocery  Busi- 
ness, and  on  the  1st  of  December,  1880,  takes  in  as  a  partner  S.  A.  Emerson. 
The  proceedings  for  opening  the  books  for  the  new  firm,  are  described  in 
paragraphs  311,  316,  317  and  49.  In  changing  a  set  of  books  from  single 
entry  to  double  entry  the  entr\'  in  the  Journal  would  be  made  in  the  same 
manner  as  the  example  here  illustrated,  with  the  exception  of  the  personal 
accounts,  which  amounts  would  already  appear  in  the  Ledger  and  of  course 
would  not  require  posting  unless  a  new  Ledger  was  opened, — then  they  would 
have  to  be  transferred.  It  is  presupposed,  in  this  set,  that  when  the  new 
partner  (Emerson)  is  taken  in,  a  new  set  of  books  will  be  opened;  hence  all 
of  Goodwin's  old  accounts  are  transferred  to  the  new  Ledger. 

THE    ENTRIES. 

Explanation  of  Goodwin  s  Investment. — Ex.  348. — Cash  on  hand  transferred 
with  Emerson's  $2,500  to  the  Cash  Book.     (See  485.) 

Ex.  349. — Goods  in  store.     (See  66.)     Posted  to  584. 

Ex.  350. — Counters,  shelves,  desks,  chairs,  etc.,  in  store  and  office.  (See 
92.)     Po.sted  to  592. 

E.x.  351. — Coal  on  hand  which  was  debited  to  Expense  account  when 
bought.     (See  195.)     Posted  to  644. 


THE   EXPLANATION. 

Ex.  352,  3,  4  and  5. — These  are  personal  accounts  owing  to  Goodwin. 
(See  164  and  173.)     Posted  to  688,  691,  702  and  704. 

Ex.  356  to  360. — These  are  unpaid  notes  held  by  Goodwin  against  these 
persons, — with  the  date  and  time  upon  which  each  is  drawn  affixed.  The 
11-18-80,  30  ds,  signifies  the  note  was  made  on  November  i8th,  1880,  on  30 
days  time.  It  is  not  necessary  to  add,  in  an  explanation  to  an  entry,  whether 
or  not  the  note  is  made  with  interest,  as  the  Bill  Book  shows  that.  Goodwin 
endorses  these  notes  over  to  the  firm,  Goodwin  &  Emerson.  (See  107.) 
Posted  to  602  to  606. 

Ex.  361. — This  is  a  Time  Draft,  which  was  drawn  by  Arbuckle  on  Good- 
win, and  by  Goodwin  "accepted,"  and  being  not  yet  due  on  December  1st,  is 
still  unpaid;  therefore,  the  same  in  effect  as  an  outstanding  note.  (See  129.) 
Posted  to  633. 

Ex.  362. — This  is  an  unpaid  note  owing  by  Goodwin  to  Thurber  &  Co. 
(See  129.)     Posted  to  634. 

Ex.  363,  4  and  5. — These  are  personal  accounts  Goodwin  owes.  (See  174.) 
Posted  to  749,  751  and  753. 

Ex.  366. — After  thus  having  made  a  record  of  all  his  present  Resources 
and  Liabilities,  Goodwin  now  finds  the  difference  between  the  sums  total  of 
each,  which  difference  is  found  to  be  $3,500,  which  amount  is  his  net  present 
worth,  and  this  he  credits  to  his  Stock  account.     (See  49.)     Posted  to  564. 

Explanation  of  S.  A.  Emerson's  Investment. — Ex.  368. — He  invests  cash 
$2,500,  and  the  amount,  together  with  Goodwin's  $500,  is  posted  to  the  debit 
side  of  the  Cash  Book.     (See  75  and  76;  also  485.) 

Ex.  369. — Emerson  holds  a  note  made  by  Hugo  Smith,  payable  to  him,  for 
$1,000,  which  note  is  endorsed  by  W.  Scott,  who  guarantees  the  payment. 
Emerson  endorses  this  note  over  to  the  firm — Goodwin  &  Emerson — when  it 
becomes  the  firm's  property.     (See  107,  1 16  and  117.)     Posted  to  607. 

Ex.  367. — As  Emerson  has  no  Liabilities,  his  Stock  account  is  now 
credited  for  the  sum  total  of  his  Resources — $3,500.  (See  49.)  Posted  to 
569. 

Ex.  370. — Russell  buys  goods  from  us  on  account,  so  we  debit  him  in  the 
"Miscellaneous  Dr."  column.  It  is  not  necessary  to  make  a  formal  Journal  entry, 
thus:  "E.  Russell  Dr.  To  Mdse.,"  before  proceeding  to  make  a  record  of  the 
goods  we  sell  to  him;  but  proceed  in  a  common-sense  manner  by  simply 
writing:  "E.  Russell,  Dr.;"  then  on  the  next  line  begin  with  the  items,  omit- 
ting the  "To"  which  is  by  many  prefixed  to  the  items.  "Red  Tape"  does  very 
well  for  the  army  and  navy,  but  the  business  man  has  no  use  for  it.  After  all 
the  items  have  thus  been  entered,  the  total  is  found  and  that  amount  is 
extended  into  column  347  to  the  credit  of  the  Merchandise  account.  (See 
371,68  and  165.)  The  debit  to  Russell  is  posted  to  707,  and  the  credit  to 
Merchandise  is  not  posted  until  the  end  of  the  montli,  and  then  it,  with  all 
the  other  merchandise  sales,  is  posted  to  the  credit  of  Merchandise  account  in 
one  entry.     (See  470.) 

Ex.  372. — Same  as  370.     Posted  to  714. 


Ex. 
373 


THE   EXPLANATION. 

Ex.  373  and  374.— Bennett  is  owing  us  $304.  He  gives  us  a  check  on  the 
bank  for  $104,  which  is  entered  in  the  Cash  Book;  and  a  note  at  90  days  for  the 
balance,  which  is  entered  here;  Bills  Receivable  account  being  debited  for  the 
note  received  and  his  account  credited,  with  all  the  explanation  that  is 
required  following  on  the  next  line.  (See  108,  113  and  171.)  373  is  posted  to 
608.  374  posted  to  696.  Remember  that  nothing  is  entered  in  the  two  outer 
columns  except  merchandise  items. 

Ex.  375.— Same  as  370.     Posted  to  715. 

Ex.  376,  377  and  378.— These  parties  having  found  that  the  goods  they 
bought  of  us  were  spoiled,  now  return  them.  We  give  them  credit  and  debit 
Merchandise  in  column  342.  (See  376.)  The  credits  to  Russell  and  Dollus 
(377  and  378)  are  posted  to  710  and  719;  and  the  debit  to  Merchandise  is  not 
posted  until  the  end  of  the  month,  when  it,  with  all  the  other  Merchandise 
debits  entered  in  this  column,  is  posted  to  the  debit  of  the  Merchandise 
account  in  one  entry.  (See  69  and  l68;  also  469.)  When  goods  are  returned 
to  us  that  were  sold  for  cash,  and  we  return  the  money  for  same  we  may  either 
take  the  money  out  of  the  sales  drawer,  and  thus  make  the  sales  for  the  day 
less,  or  take  it  out  of  our  regular  cash  drawer,  and  debit  the  amount  returned 
to  Merchandise  on  the  Cash  Book. 

Ex.  379. — When  the  keg  of  herrings  is  returned  to  us  by  Dollus,  as  spoiled, 
we  examine  those  remaining  in  our  stock,  and  find  there  are  in  all  5  kegs  of 
same  spoiled;  so  we  return  them  to  the  firm  from  whom  we  bought  them, 
G.  W.  Boreland  &  Co.,  charging  Boreland  and  crediting  Merchandise.  (See 
178  and  70.)     Posted  to  775. 

Ex.  380  and  381. — We  are  owing  Arbuckle  Bros.  They  draw  on  us  at  60 
days  from  Dec.  3d,  1880;  we  write  "Accepted,"  etc.,  across  the  face  of  the 
draft,  and  return  it  to  them,  and  by  so  doing  promise  to  pay  them  in  60 
days  from  Dec.  3d,  this  amount,  which  is  the  same  in  effect  as  giving  them 
our  note;  therefore,  we  debit  them  and  credit  Bills  Payable.  (See  182,  132 
and  133.)     380  posted  to  754.     381  posted  to  635. 

Ex.  382  and  383. — Richardson  is  owing  us  an  account  which  is  long  ])ast- 
due,  so  we  charge  him  interest  and  draw  on  him  at  90  days  for  the  amount  of 
his  account  and  interest.  The  interest  is  charged  here,  but  no  entry  is  made 
of  the  draft  until  it  is  returned.  (See  151  and  142.)  382  posted  to  705.  383 
posted  to  664. 

Ex.  384  and  385. — When  a  Journal  page  has  been  filled,  the  totals  of  the 
Mdse.  Dr.  and  Mdse.  Cr.  columns  are  found  and  carried  forward  to  the  follow- 
ing page;  and  thus  the  totals  are  carried  forward  from  page  to  page  until  the 
end  of  the  month. 

Ex.  386.— Russell  is  a  farmer,  and  brings  produce  into  market;  we  buy  it 
from  him  and  give  him  credit  on  his  account.    (See  dj  and  175.)    Posted  to  711. 

Ex.  387. — Same  as  370.     Posted  to  708. 

Ex.  388  and  389. — The  draft  we  drew  on  Richardson  December  8th  is  now 
returned  to  us  "accepted"  by  him.  This  draft  having  been  accepted  by  him 
and  returned  to  us,  is  the  same  in  effect  as  though  he  had  sent  us  a  note; 


385 

TO 

420 


THE   ILLUSTRATION. 
JOURNAL. 


63. 

December  9th,  1880. 

"„r| 

MiscU.  1 

Dr.        ' 

kl 

Mdst.  forward, 
Mds,..  Dr.  to  Ed.  Russell. 
50  doz.  Eggs.  20c.                                        .000     ■ 
JO  lbs.  Butter.  30c,                                        6  00      i 

L. 
F. 

M.s«u.  1 

Mdse. 
Cr. 

Sli;    .Jj 

oo 

« 

.6 

00 

»4 

65 

38J. 

] 

,0 

80 

44 

Ed.  Russell.                                                         Dr.      i 
3  bbls.  Salt,  =.00.                                           6  00 
I  bbl.  Flour.                                                       4  80 

II. 

,c 

80 

SS8-389. 

190 

00 

- 

Bills  Receivable,  Dr.  to  Frank  Richardson. 
He  accepted  our  D'ft  at  90  ds.  from  t2-8-8o. 

■•♦ 

100 

00 

3'J0.391. 

150 

CO 

- 

13- 
Store  and  Office  Fixtures.  Dr.  to  Bills  Payable. 
Gave  Hall's  Safe  &  Lock  Co.  note  at  30  ds.. 
12-13-80,  for  Safe. 

- 

,=e 

" 

»82. 
393-394. 

7 

35 

^5 

Frank  Burgess,                                                    Dr. 
2  lbs.  Cheese,  30c.  i  doz.  Eggs,  25c.            55 
18  lbs.  A  Sugar.  2.00,  1  Broom,  30c,         2  30 
I  bU.  Apples.  3.00.  I  sack  Flour,  1.50.     4  5° 

L.  S.  &  M.  S.  Ry.  Dr.  to  Fr-t  and  Express. 
Ov'rch.  on  20  bbls.  Sugar  at  SC  12-4. 

43 

X 

«)0 

7 

35 

396. 
396-39;. 

.89 

55 
30 

46 

S.  A.  Emerson,                                                   Dr. 

2  gals.  Vmegar.  50c.  5  lbs.  Butter,  1.50,  a  00 

3  lbs.  Lard,  30c,  I  can  B.  Powder,  25c.        55 

Procter  &  Gamble  Dr.  to  Bills  Payable. 
Sent  note  at  60  ds.  from  12-8-80. 

4. 

189 

30 

• 

55 

398. 

3 

00 

46 

15- 

G.  W.  Boreland  &  Co..                                     Dr. 

20  Empty  Boxes,                                            15 

3 

00 

399-400.   ' 

♦ 

00 

4« 

Store  and  Office.Fixtures  Dr.  to  F.  Burgess, 
For  making  new  shelves. 

** 

* 

00 

401.       5S8 

404. 

407. 

5' 

Mdse.  Dr.  to  Sundries. 

,4^    _5:2_5 
J.  K.  Armsby  &  Co.                     a         .3 
ArbuckleBros.,6ods.                                  3 
B.  T.  Babbitt.  30  ds.                                     6 
28.40     17.85 
G.  W.  Boreland  &  Co.                 a          14 
CatlinTobacc.iCo.tods.                     11-28 
Sprague,  Warner  .t  Co.                                 7 

4^ 

46 
64 
89 

00 

»5 
62 

408. 

1?S: 

411. 
412. 
413. 
414. 
415. 
416. 

9 
'I 

1 

s 

40 
19 

45 
44 

45 

43 

■7- 
Sundries  Dr.  to  Mdse. 

Frank  Burgess.                                                   .-43 
S.  A.  Emerson.                                                      44 
R.  N.  Buck.                                                       44 
Ed.  Russell,                                                           44 
Alex.  DoUus,                                                      =-5i 
H.  S.  Cole,                                                  =-5i 
G.  W.  Bennett.                                                 5* 
Wm.  Dorman.                                                       57 

1      223 

53 

417-418. 

00 

43 

1 

H.  L.  Richardson.  Att-y,  Dr.  to  Bills  Rec. 
Gave   him   for  coll.   S.   A.  Fisher's  note  of 
Oct.  .2-80  at  60  ds. 

18. 

J.  K.  Armsby  &  Co.  Dr.  to  Ed.  Russell, 

For  Acc't— Sales  of   Cheese    reported  by 
Armsby  for  acc't  of  Russell. 

4I9-4S0. 

'4 

60 

46 

- 

- 

S7S 

96 

Forward, 

•7 

88 

THE    EXPLANATION. 

therefore,  we  debit  Bills  Receivable  and  credit  Richardson.  (See  1 14,  115  and 
172.)     388  posted  to  609.     389  posted  to  706. 

Ex.  390  and  391.— We  buy  a  safe  from  H.  S.  &  L.  Co.,  and  give  therefor 
our  note  at  30 days.  Debit  Store  &  Office  Fixtures  for  the  safe  we  receive,  and 
credit  Bills  Payable  for  the  note  wc  give.  (See  93  and  130.)  390  posted  to 
595-     39'  posted  to  636. 

Ex.  392.— Same  as  370.     Posted  to  723. 

Ex.  393  and  394. — The  Railroad  company  charged  us  5  cents  per  bbl.  too 
much  on  freight  bill  of  recent  date  for  20  bbls.  Sugar.  We  are  not  allowed 
to  deduct  the  over-charge  from  the  bill  and  pay  the  balance;  but  are  obliged 
to  pay  the  full  amount  of  the  bill;  then  we  may  make  the  claim  to  the  Rail- 
road company, — charge  them  and  credit  Freight  &  Express.  If  they  do  not 
allow  this  claim  after  we  have  thus  charged  it,  we  are  then  obliged  to  debit 
Freight  &  Express  and  credit  them — thereby  undoing  the  charge  first  made. 
(See  206.)     393  posted  to  736.     394  posted  to  650. 

Ex.  395. — Emerson  takes  goods  from  the  store  for  his  private  use.  (See 
59.)     Posted  to  577. 

Ex.  396  and  397.— We  are  owing  P.  &  G.  on  account  for  a  bill  of  goods  we 
bought  from  them  on  60  days.  On  the  14th  of  December  we  write  a  note  and 
send  it  to  them,  dating  the  note  Dec.  8th,  1880,— the  date  of  the  bill.  (See 
181,  130  and  131.)     396  posted  to  761.     397  posted  to  637. 

Ex.  398. — This  firm  buys  of  us  empty  bo.ves,  and  as  the  cases  or  boxes 
are  usually  charged  to  us  on  the  bills  of  goods  we  buy,  and  arc  consequently 
entered  by  us  as  merchandise,  we  must  now  credit  Merchandise.  Posted  to 
776. 

Ex.  399  and  400. — Frank  Burgess,  our  customer,  is  a  carpenter,  and  we 
employ  him  to  make  for  us  some  new  shelving,  for  which  shelving  we  allow 
him  $4.  This  amount  he  wishes  credited  to  h*s  account,  so  we  debit  Store  & 
Office  Fixtures  and  credit  him.     399  posted  to  596.     400  posted  to  726. 

Ex.401  to  407. — It  is  now  the  middle  of  the  month;  therefore,  we  take 
the  invoices  which  have  accumulated  since  the  first,  arrange  them  in  alpha- 
betical form,  and  enter  them  in  the  manner  here  illustrated.  The  "Xijiit" 
and  "-j|-,"  in  paragraph  402,  is  but  an  abbreviated  way  of  indicating  Dec. 
2d,  1880,  $14.60,  and  Dec.  13th,  1880,  $5.25— these  being  the  dates  and 
amounts  of  bills  we  bought  from  Armsby.  We  sometimes  enter  a  great 
many  bills  for  a  firm,  and  this  way  of  entering  them  is  then  found  to  be  a 
great  convenience,  as  much  time  and  much  Journal  paper  is  saved  by  so 
doing.  (See  460  for  a  better  example.)  When  there  is  only  one  bill,  we 
simply  write  the  day  of  the  month  on  the  end  of  the  line,  as  in  403,  for 
Dec.  3d,—  /.  e.,  if  the  bill  is  dated  in  the  present  moiitli;  but  if  dated  in 
the  previous  month,  we  indicate  the  month  and  day  as  in  paragraph  406  for 
Nov.  28th.  If .  the  time  on  which  the  goods  were  sold  is  given,  we  add 
the  same  after  the  name,  as  in  paragraph  403,  etc.  After  the  bills  have  all 
been  entered,  we  find  the  sum  total  of  thcni,  and  enter  that  amount  to  the 

81 


390 

TO 

407 


421 

TO 

452 


THE  ILLUSTRATION. 
JOURNAL. 


64. 


December  21st,  1880. 


Mase. 

MU„U. 

42..   "' 
4i2. 

96 

'78 

S3 

423. 

ill: 

426. 

23 

i 

s 

3 
4= 
14 

i 
i 

8^ 

42J. 
428. 

10 

4S1-4S2. 

- 

00 

433-434. 

28 

'\ 

435. 
436. 

>4X 

76 

437. 

438. 

7 

00 
'4 

439-440. 

50 

441-442. 

.=0 

CO 

443. 

nt 

446. 

146 

50 
'9 

447. 

59 

97 

448. 
449. 

4-.0-4ol. 

1  '^ 

00 

452. 

6a 

578 

66 

iilk  Receivable  Dr 

Bills  Rec.-Old  ; 

paid  50  00,  11-ii 


60  ds,  78  23 

Sundries  Dr.  to  Mdse. 

Bennett.  1-58 

Adolph  Piper. 

DoUus. 

H.  M.  Dickinson. 

Burgess. 

Benj.  Goodwin,  Jr. 

Emerson,  59 

D.  Cameron. 

W.  C.  Lyman,  73  Dearborn  ave.  60 

Tom  Keene,  320  Mich.  ave.  62 

Mdse.  Dr.  to  Sundries. 

Bennett,  C.  B. —  36 

Lyman, 

Doll  us,  37 

23- 

G.  W.  BoreUnd  &  Co.  Dr.  to  G.  W.  Bennett. 
Gave   Boreland   order  on   Bennett    for   dry 
goods,  dated  Dec.  23-80. 

Sprague.  Warner  &  Co.  Dr.  to  Bills  Payable, 
Ace.    their   D'ft  30  ds-   from  12-20-80,  favor 
of  Thompson  &  Risley. 

Bills  Receivable  Dr.  to  Sundries. 

Bills   Kec— Old  note   A.  T.   Porter,  30  ds. 

,  Interest,  on  above, 

Rec*d  note  at  60  ds.  from  Dec.   23-80,  for 
8241.76.  to  renew  old  note  and  int. 


Arbucklc  Bros.— Sent  note  60  ds.  12-18-80. 
B.  T.  Babbitt—  "  "  30  ds.  i2-i4-8a 
Catlin  Tobacco  Co  — Acc't  D'ft  60  ds.  11-28-80. 

27. 
Bills  Receivable  Dr.  to  Sundries. 
Rcc'd  following  described  notes: 

Frank  Burgess  -Note  60  ds.  12-25-80, 
W.  C.  Lyman— Note  30  ds.  12-27-80, 

Lost  Acc'ts  &  Notes  Dr.  to  Sam.  Hurto, 

J162.50,    tost  40  per  c 
28. 


Mdse.  Dr. 


>G.  W. 


506 


THE   EXl'LANATION. 

debit  of  Merchandise   in  the  "Mdse.  Dr."  column.     (See  309,  331    and    175.) 
402  to  407  posted  to  766,  767,  756,  759,  778,  779,  750  and  783. 

Ex.  408  to  416. — These  are  charges  transferred  from  Sales  Books  i  and  2, 
referred  to  in  paragraph  337.  It  is  not  thought  necessary  to  give,  in  this 
work,  the  form  of  the  Sales  Book,  as  an  entry  made  in  this  book  is  made  in 
precisely  the  same  form  and  manner  as  in  paragraph  370,  and  when  trans- 
ferred to  the  Journal,  simply  the  amount,  person's  name,  number  of  Sales 
Book  and  page  is  taken.  When  we  wish  to  refer  to  an  original  charge,  we 
turn  to  the  Journal  and  here  find  the  book  (Sales  Book)  and  page  upon  which 
the  sale  is  recorded.  In  this  example,  409  to  412  are  transferred  from  Sales 
Book  I,  and  413  to  416  from  Sales  Book  2, — the  pages  upon  which  such 
charges  are  made  being  added.  (See  14.)  Having  entered  all  the  charges 
from  the  Sales  Books,  we  find  the  sum-total  of  them  all,  and  credit  Merchan- 
dise in  the  "Mdse.  Cr."  column  for  the  amount.  409  to  416  posted  to  724, 
578,  737,  709,  716,  738,  692  and  734.  Paragraphs  411  and  414  are  petty 
accounts  referred  to  in  paragraph  327. 

^  Ex.  417  and  418. — Fisher's  note  was  due  on  the  14th  inst.,  but  he  failed  to 
pay  it,  and,  as  there  seemed  to  be  poor  prospect  of  our  collecting  the  account, 
we  hand  it  over  to  our  attorney,  Richardson,  for  collection.  This  note  was 
debited  to  Bills  Receivable  account,  so  we  now  credit  Bills  Receivable  and 
debit  Richardson.     (See  262  and  264.)    417  posted  to  684.    418  posted  to  621. 

Ex.  419  and  420. — Russell,  the  farmer,  sent  to  Armsby,  the  commission 
merchant,  cheese  to  be  sold  on  commission,  with  instructions  to  pay  the 
proceeds  of  the  sales  of  same  to  us.  As  we  are  owing  Armsby  &  Co.,  they 
render  to  us  an  account-sales  and  request  us  to  give  Russell  credit  for  the 
amount  of  same.  We  then  debit  Armsby  and  credit  Russell.  419  posted  to 
763.     420  posted  to  712. 

Ex.  421  to  425. — Russell's  note  of  November  i8th,  at  30  ds.  for  $200,  is  now 
due.  On  December  3d  he  paid  $50  on  this  note.  (See  488.)  He  is  now 
unable  to  pay  the  balance,  and  wishes  to  give  us  two  new  notes  for  the  bal- 
ance of  the  old  ($150),  and  the  interest  on  same  to  date  ($1.27),  and  the 
balance  of  his  account  in  the  Ledger  ($26.96).  We  take  from  him  the  new 
notes  (see  425),  and  surrender  to  him  the  old  note.  421  posted  to  610  and  611. 
422  posted  to  624.  423  posted  to  667.  424  posted  to  713.  Another  way  of 
recording  this  transaction,  would  be  to  debit  Russell's  account  for  the  balance 
due  on  the  old  note  surrendered  and  interest,  and  then  credit  his  account  for 
the  new  notes  he  gives  us.  If  this  method  were  adopted,  the  entry  would 
then  be  as  follows: 

151.27         Ed.  Russell  Dr.  to  Sundries, 

Bills  Receivable,  150.00 

Interest,  1.27 

Surrendered  note  of  Nov.  18-S0— 30  ds.— 
S200.     Payment  on  same,  S50. 
17S.23         Bills  Receivable  Dr.  to  E.  Russell,  178.23 

Rec'd  following-described  notes: 
Dec.  21-So — 30  ds.— Sioo.oo 
60  "  7823 


408 

TO 

425 


453 
470 


THE  ILLUSTRATION. 


65. 


JOURNAL. 
December  31st,  i8i 


MisceU      II    Mdse. 


,.!JI 


Forward. 
Salaries  Dr.  to  Sundries. 
For  (Ji)  month  of  Dec. 
M.  W.  Saxton. 
J.-.S.  Kinsella. 
F.  P.  Mast. 
Herman  Smith, 


4S8. 
469. 


Mdse.  Dr.  to  Sundries. 

Arbuckle.  60  ds. 


Procter  &  Gamble,  60  ds.   8 


19    40 

«89  :  3f 


The   following    amounts,    on   a 

ccounts 

and 

notes,  ar 

this  day  by  us  considered  luorth- 

irss;  and 

are  therefore  charged  to  Lost  Acc'ts 

and  No.e 

Lost  Ace' 

s&Nolcs  Dr.  Sundries 
Alex.  Dollus. 

Bills    Rec.      W.    C.    I 

yman's 

note 

Dec.  syth,  '80,  30  ds. 

H.  L.  Richardson.  At 

■y.     \\- 

iiam 

Dorman  acc't, 

409.     1,073    55 
470.  ' 


Mdse.  Dr.     Tol.al  for  Dec, 


84 


Ex. 
42G 


THE   EXPLANATION. 

Ex.  426. — Same  as  40S  to  416.  After  a  customer's  name  has  become 
familiar  to  us,  and  we  have  only  one  person  by  that  surname  in  our  Ledger, 
we  omit  the  initials,  as  in  this  example.  (See  332.)  It  is  not  necessary  to 
ditto  the  Sales  Book  page;  but  we  understand  that  it  is  the  same  as  above 
until  changed.  Piper,  Dickinson,  Goodwin  and  Cameron  are  petty  customers, 
and  these  amounts  are  posted  under  "Petty  Accounts."  Lyman  and  Kecne 
are  new  customers,  therefore  residence  is  added.  It  is  not  thought  neces- 
sary to  indicate  where  the  amounts  in  this  example  are  posted,  as  the  student 
by  this  time  has  sufficient  knowledge  of  posting  such  charges. 

Ex.  427  to  430. — When  goods  are  frequently  returned  to  us,  it  is  advisable 
to  keep  a  "Credit  Book"  in  which  to  enter  these  credits.  When  this  is  done, 
we  simply  write  in  that  book  the  person's  name  and  a  description  of  the  goods 
returned;  then  those  credits  are  transferred  to  the  Journal  in  the  manner 
here  indicated, — entering  the  person's  name,  C.  B.  for  Credit  Book,  the  page 
and  amount.     428  posted  to  697.     429  posted  to  730.     430  posted  to  720. 

Ex.431  and  432. — We  give  Boreland,  whom  we  are  owing,  an  order  on 
Bennett  (a  dry-goods  merchant),  who  is  owing  us,  for  dry  goods  to  the 
amount  of  $20,  with  instructions  to  Bennett  to  charge  the  same  to  our 
account.  This  is  to  us  the  same  in  effect  as  giving  Boreland  a  sight  draft  on 
Bennett,  so  the  entry  is  made  the  same  as  in  paragraphs  439  and  440, — the 
explanation  only  being  different.     431  posted  to  yj^.     432  posted  to  698. 

Ex.  433  and  434. — We  are  owing  S.  W.  &  Co.,  and  they  are  owing  Thomp- 
son &  Risley.  They  draw  on  us  at  30  days  from  Dec.  20th,  making  the 
draft  payable  to  T.  &  R.,  and  we  accept  it,  thereby  promising  to  pay  T.  &  R. 
in  30  days,  for  S.  W.  &  Co.,  $28.45.  (See  182  and  132.)  433  posted  to  782. 
434  posted  to  638. 

Ex.  435,  436  and  437. — Porter  cannot  pay  his  note,  which  is  now  due, 
therefore  renews  it  for  60  days,  giving  us  a  new  note  for  the  amount  of  the  old 
note  and  interest.  When  he  gives  us  the  new  note  we  surrender  to  him  the 
old.  This,  also,  may  be  treated  according  to  the  other  method  described  in 
Ex.  421  to  425.  (See  124.)  435  posted  to  613.  436  posted  to  625.  437 
posted  to  668. 

Ex.  438. — Same  as  408  to  416. 

Ex.  439  and  440. — Dollus  is  owing  us  and  we  are  owing  Armsby,  so  we 
give  Armsby  a  sight  draft  on  Dollus.  If  sight  drafts  are  not  paid  when 
drawn  by  us  on  one  person  payable  to  another,  and  are  returned  to  us,  we  are 
then  obliged  to  undo  the  entry  we  made  when  the  draft  was  drawn,  which  " 
would  be  done  by  debiting  the  person  on  whom  we  drew,  and  crediting  the 
person  to  whom  we  made  the  draft  payable.  (See  179  and  170.)  439  posted 
to  764.     440  posted  to  721. 

Ex.  441  and  442. — We  hear  that  Dorman  is  about  to  fail;  therefore,  we 
make  a  certified  statement  of  his  account  and  hand  it  to  our  attorney  for  col- 
lection. "What  is  meant  by  a  certified  statement?"  A  certified  statement  is 
an  itemized  statement  of  a  person's  account   made  out  and  sworn  to  by  us 

85 


442 


Ex. 
443 


470 


THE   EXPLANATION. 

before  a  notary  public  as  being  "correct,  to  the  best  of  our  knowledge  and 
belief"     (See  262  and  264.)     441  posted  to  685.     442  posted  to  735. 

Ex.443  to  446. — We  are  owing  these  different  parties.  We  send  Arbuv.Kle 
and  Babbitt  notes  on  60  and  30  days  from  the  dates  of  their  bills,  as  indicated 
in  paragraphs  444  and  445;  and  we  accept  the  draft  drawn  on  us  by  the  Catlin 
Tobacco  Co.  at  60  days  from  Nov.  28th,  as  indicated  in  paragraph  446.  We 
then  credit  Bills  Payable  for  the  sum  total  of  all  these,  as  indicated  in  para- 
graph 443.  The  entry  for  these  is  the  same  in  effect  as  were  the  entries  in 
paragraphs  3S0,  381,  and  396,  397,  excepting  that  here  we  make  an  entry  for 
several  notes,  and  in  those  cases,  for  only  one  at  a  time.  The  items  are  posted 
separately  on  the  Bills  Payable  account  for  checking  purposes.  443  posted  to 
639,  640  and  641.     444  posted  to  755.     445  posted  to  758.     446  posted  to  748. 

Ex.  447,  448  and  449. — Some  book-keepers  hold  the  notes  they  receive 
several  days  before  entering  them,  and  then  enter  them  all  together  in  the 
manner  here  illustrated.  Each  of  the  parties  is  then  credited,  and  Bills 
Receivable  account  debited  for  each  item  separately.  447  posted  to  614  and 
615.     448  posted  to  727.     449  posted  to  731. 

Ex.  450  and  451. — Hurto  is  insolvent,  and  compromises  with  his  creditors 
for  a  settlement  in  full  for  sixty  cents  on  the  dollar,  /.  e.,  each  one  of  his 
creditors  signs  a  paper  which  is  presented  to  them  agreeing  to  accept  sixty 
cents  on  the  dollar  in  full  settlement.  Hurto  then  gives  us  a  check  for  $97.50, 
which  is  60  per  cent,  (entered  on  Cash  Book— see  500),  and  the  remainder, 
$65  (40  per  cent.),  is  of  course  lost.  (See  265.)  450  posted  to  784.  451 
posted  to  690. 

Ex.  452. — Same  as  427  to  430.     Posted  to  700. 

Ex.  453  to  457. — For  full  instructions  and  explanations  see  latter  part  of 
paragraphs  336  and  337;  also  201  and  204.  453  posted  to  654.  454,  5,  6  and 
7  posted  to  677,  679,  681  and  683. 

Ex.  458  to  463. — Same  as  401  to  407.  When  several  bills  arc  bought  from 
a  firm  on  different  time,  the  time  on  which  each  is  bought  is  indicated  in  the 
manner  illustrated  in  paragraph  460.  For  example:  "=!||""  is  Dec.  15, 
$20.00  on  60  days  time.     Posting  same  as  Ex.  401   to  407. 

Ex.  464  to  468. — For  full  instructions  and  explanations,  see  paragraphs 
266,  270,  271  and  272.  Dollus  having  suddenly  "left  for  parts  unknown,"  we 
call  his  account  lost.  Lyman  having  recently  failed,  his  note  is  considered  by 
us  as  worthless.  Our  attorney  reports  that  of  the  remaining  $50  due  on 
Dorman's  account,  he  believes  not  more  than  $25  to  be  collectible,  so  we 
carry  $25  to  Lost  Accounts  &  Notes.  465  posted  to  785,  7S6  and  787.  466 
posted  to  722.     467  posted  to  626.     468  posted  to  687. 

Ex.  469  and  470.— Having  carried  forward  the  Merchandise  debit  for  the 
entire  month,  we  now  post  the  total  amount  for  the  month  to  debit  of  the 
Merchandise  account  in  the  Ledger  (see  586);  and  having  carried  forward  the 
Merchandise  credit  for  the  entire  month,  we  now  post  the  total  amount  for 
the  month  to  the  credit  of  the  Merchandise  account  in  the  Ledger.    (See  590.) 


86 


471 

TO 

554 


90 


Dr. 


THE    ILLUSTRATION. 


Cash. 


CASH 


DATS 

k 

4;S.                                 474. 

Cr. 

Mdsk. 
Cr. 

TOTAl- 

471. 

472 

47.. 

«,. 

4 

i88o. 

T 

485.       Dec. 

I 

Ealance  on  hatui  (am't  invested). 

3.000  loo 

486. 

487. 

3 

To  Mdse.                       Sales. 

184 
=45 

30 
34 

488. 

41 

••  Bills  Receivable.     Paym't  on  E.  Russell's  note.  11-18-80,  30  ds. 

50 

00 

1 

489. 

1 

41 

•■      "            ■•                Disc'ted ic^2o-8o,  60  ds. 

200 

00 

489ii. 

44 

•'  G.  W   Bennett.                                                                                  C'k. 

104 

oo 

6  i 

••  Mdse.                        Sales, 

213 

80 

490. 

i'  4' 

■•   Bills  Receivable.    Disc'ted  E.  Russell's  note,  11-18-80.  60  ds, 

100 

00 

8  'i    / 

••   Mdse.                        Sales,                                                                             1 

260 

4a 

0    1       *> 

■74 

20 

491. 

;° 

42 

■•  Fr't  &  Exp.              O'c.  refd  N.  Y.  C. 

..    Mdse.                           Sales,                                                                ^''^■^^ 

' 

24 

140 

20 

492. 

15 

'/ 

••   F.  H.  Miller.           He  paid  our  St.  d'ft. 
"   Mdse.                        Sales, 

•  84 

00 

T35 

80 

498. 

t? 

41 

•■   Bills  Receivable.     Paym't  on  H.  Smith's  note,  11-.4-80,  sods. 

500. 

00 

494. 

"   Interest.                    On  above  note  («i,coo)  to  date. 

7 

33 

.Bli    / 

■•  Mdse.                       Sales. 

209 

fio 

..,  !  / 

«      « 

167 

35 

495. 

41 

■■   Bills  Receivable.     Disc'ted  G.  W.  Bennett's  note.  12-3-80.  90  ds. 

200 

oo 

496. 

42 

"   Interest.                     On  above. 

76 

497. 

23 

44 

••   G.  W.  Bennett, 

3a 

■9 

498. 

45 

"   D.  Cameron. 

43 

=4 

/ 

"  Mdse.                       Sales. 

183 

4S 

25 

V 

" 

49 

58 

499. 

45 

•■    H.  S.  Cole, 

6 

40 

600. 

27 

43 

■•  Sam    Hurlo.             Sixty  cents  on  the  dollar  of  claim  ($162.50). 

97 

50 

V 

•■  Mdse.                      Sales, 

i>4 

40 

501. 

45 

•'  L.  S.  &  M.  S.  R'y, 

t 

00 

1 

602. 

42 

"   Fr't  &  Exp.               O'c.  ret'd  C.  R.  I.  &  P., 

55 

' 

=9 

V 

"  Mdse,                          Sales, 

167 

45 

508. 

45 

"  B.  Goodwin.  Jr., 

5 

65 

j 

504. 

43 

"   H.  L.  Richardson,  .\tt'y.     Coll.  on  \V.  Dorman's  acc't. 

50 

oo 

3° 

V 

"   Mdse.                         Sales, 

»37 

8a 

^ 

31 

V 

" 

15a 

50 

606.' 

41 

I 

"   Bills  Payable.            Borrowed  from  W.  Teele  on  note,  30  ds,  12-31-! 

i      aso 

00 

j 

647. 

To  Mdse.                     Total  for  Dec,  .880. 

1,536      19 

1 

548. 

Total  cash  rec'd. 

'                i 

4,aes  \  s< 

549. 

J       L'„ 

1 

1                1 

7.a68  '  8, 

l8S 

\\ 

1 

~ 

654.         Jan. 

1 

Balance  on  hand. 

I 

3,776  !  .so 

88 


THE  ILLUSTRATION. 


BOOK. 


4781. 

Dec. 


Cash. 


(All  these  items  are  posted  to  the  Debit  side  of  the  Ledger.) 


480. 


4SI 


Expense.  Rent  of  Store  to  1-1-81, 

V        ■•  "  Set  Blank  Books  =6.40.  Stationery  bill  7.20. 

'  Insurance  Policy  53,000.  "^Etna,"  i  per  cent, 

'  Interest.  Dis.  on  E.  Russell's  note,  10-20-80— «o  ds, 

'  J.  H.  Goodwin.       On  acc't, 
'  Store  &  O.  Fixtures.     New  Counter, 
'   Expense.  Ink  75c,  Pens  1.00,  Eraser  50c. 

'   Interest.  Dis.  on  Russell's  note,  11-18— 60  ds. 

'   S.  A.  Emerson.       On  acc't, 
'  Store  &  O.  Fixtures.     New  Desk  30.00,  Chair  5.00, 

■  Fr't  &  Exp.  L.  S.  &  M.  S  12.20,  N.  Y.  C.  &  H.  R.  7.14. 

■  Salaries.  F.  Mast  10.00.  H.  Smith  3.75. 
J.  Kinsella  10.00,  M,  W.  Saxton  12.50, 

'  Union  Trust  Co.  Shares.     5  Shares. 

•  Expense.  Sign— "Goodwin  &  Emerson," 

•  Mdse.  40  bu.  Potatoes  50c. 

•  Fr't  &  Exp.  C,  R.  I.  &  P,  6.20,  Dray  50c,  Express  i.oo, 

■  Catlin  Tobacco  Co,    Sent  D'ft, 


••  Coll.  &  Exch. 
••  Bills  Payable. 
■■  Coll  &  Exch. 
"  Advertising. 
••  Baker  &  Co. 
"  Coll.  &  Exch 


Kinsella  10.00,  Saxton  1 
Smith  3.75,  Mast  10.00, 


5  M  Circulars  4.00. 
Paid  D'ft  12-13-80, 
On  above, 
S  tons  Range  Coal  t 


Bills  Receivable     Took  i 

60 

Bills  Payable 


E.  Russell's 
lote  Thurbei 


&   Co., 


On  above  d'ft. 

Dray  1.00,  C  &  N  -W, 

Dis.  Bennett  64c,  Cami 


Sent  D'ft  for  1 
60  ds, 
*•   Interest.  On  above  note, 

■•   Coll.  &  Exch. 
•■   Fr't  &  Exp. 
■•  Mdse. 

"  F.  P.  Mast.  On  acc't,  I 

"  S.  A.  Emerson.       On  acc't, 
■•  Herman  Smith. 

•'  Store  &  O.  Fixt.    Show  Case.  ! 

"   Expense.  2  M  Statements  4.00,  Letter  &  Bill  Hds  5.20, 

"  Jas.  Kinsella.  On  ace. 

■■  J.  H.  Goodwin. 

"    •■  •■  Paid  bill  Shoes. 

"   Bills  Receivable.    Loaned  J.  Huggins  on  note  60  ds,  12-27-81,        1 
•■  Bills  Payable.         Paid  on  note  Hall's  Safe  &  Lock  Co.  i2-i3-«<  J 
30  ds,  I 

••  J.  K.  Annsby  &  Co.     On  acc't,  C'li 

"    Expense.  Gas  bill  G.  &  E., 

••  S.  A.  Emerson.      Gas  bill, 


Total  for  the  month. 

Total  cash  paid. 


Cr. 


91. 


•+ 


^ 


■3 

50 

i 

3  35 

I 

00 

1 

15 

00 

35 

00 

'9 

34 

'3 

75 

as 

SO 

5= 

00 

18 

<» 

uo 

00 

7 

70 

340 

40 
50 

13 

75 

640 

25 

00 

65 

89 


Ex. 
471 


484 


THE   EXPLANATION. 


EXPLANATION  OF  THE  CASH  BOOK  ENTRIES  ON  THE 
TWO  PRECEDING  PAGES. 

THE   COLUMNS. 

As  indicated  at  the  top  of  the  respective  columns,  471  and  478  are  the 
"Date"  columns;  472  and  479  are  the  "L.  F.,"  or  "Posting"  columns,  in  which 
to  write  the  Ledger  page  to  which  an  item  is  posted. 

Ex.  475.— This  is  the  "Miscellaneous,"  or  "General"  column,  in  which  is 
entered  all  cash  received  (except  for  cash  sales  of  merchandise), — all  items 
entered  in  this  column  are  credited  to  the  respective  accounts  indicated  under 
473.     (See  13,43  and  45.) 

Ex.  476.— This  is  an  extra  column  kept  in  which  to  enter  the  merchandise 
cash  sales.  The  object  in  thus  extending  the  cash  sales  into  this  column 
is  to  save  labor  in  posting;  for  by  so  doing,  it  is  necessary  to  post  the 
Merchandise  cash  sales  only  once  a  month,— crediting  Mdse.  at  the  end  of  the 
month  for  the  total  sales  for  the  month,  as  shown  by  the  total  of  this  column. 
(See  547.)  When  the  Cash  Book  is  closed  daily,  this  column  cannot  be  used,— 
then  the  cash  sales  items  are  entered  in  the  "Miscellaneous"  column,  and  we 
are  obliged  to  post  the  same  to  the  Merchandise  account  daily. 

Ex.  477.— This  is  the  "footing,"  or  "total"  column,  into  which  is  extended 
the  balance  of  cash  on  hand  in  the  morning,  and  the  total  received  during  the 
day,  at  night.     (See  485  and  548.) 

Ex.  482. —  ihis  is  the  "Miscellaneous,"  or  "General"  column,  in  which  is 
entered  all  cash  paid  out  (except  for  items  belonging  to  the  Expense 
account), — all  items  entered  in  this  column  are  debited  to  the  respective 
accounts  indicated  under  480.     (See  13,  44  and  46.) 

Ex.  483. — This  is  an  extra  column  kept,  in  which  to  extend  all  items  to  be 
debited  to  the  Expense  account.  This  is  kept  for  the  same  reason  that  any 
extra  column  is  kept — to  save  labor  in  posting, — the  total  of  this  column 
being  posted  to  the  debit  of  the  Expense  account  at  the  end  of  the  month. 
(See  550.)  When  the  Cash  Book  is  closed  daily,  it  is  scarcely  advisable  to 
keep  this  extra  column,  as  there  are  seldom  enough  entries  to  the  Expense 
account  to  pay  for  keeping  it, — the  Expense  items  are  then  entered  in  the 
column  with  the  miscellaneous  items,  and  posted  daily  to  the  E.xpense  account. 

Ex.  484.— This  is  the  credit  "footing"  or  "total"  column,  into  which  is 
extended,  every  night,  the  total  amount  of  cash  paid  out  during  the  day,  and 
the  balance  of  cash  remaining  on  hand  at  night.     (See  551  and  552.) 

Ex.  473  and  474. — When  wc  receive  cash,  we  write  the  name  of  the  account 
we  are  going  to  credit  for  that  amount  under  473,  and  if  any  explanation  be 
required,  we  write  it  in  as  few  words  as  possible  under  474. 

Ex.  480  and  481. — When  we  pay  out  cash,  we  write  the  name  of  the 
account  we  are  going  to  debit  for  that  amount  under  480;  and  if  any  explana- 
tion be  required,  wc  write  it  in  as  few  words  as  possible  under  481. 


Ex. 

485 

THE   EXPLANATION.  TO 

494 

THE   ENTRIES.— DEBIT  SIDE. 

Ex.  485. — When  the  Cash  Book  is  closed  daily,  we  bring  down  on  the 
debit  side,  each  morning,  the  amount  of  cash  on  hand  for  the  beginning  of  the 
day's  business  in  the  manner  here  illustrated;  always  extending  the  amount 
into  the  outer  column. 

Ex.  4S6  and  487.— No  entry  is  made  of  the  cash  sales  in  the  Cash  Book 
until  the  close  of  the  day,  and  then  Merchandise  is  credited  for  the  total  sales 
of  the  day  in  one  entry  as  here  shown.  When  an  extra  column  is  kept,  it  is 
advisable  to  make  a  check  in  the  "L.  F."  column  opposite  all  items  for  that 
column,  so  as  to  leave  no  blank  lines  whereby  the  eye  might  be  confused 
in  posting. 

Ex.  488.— Russell  pays  us  $50  on  his  30-days  note  of  Nov.  i8th,  which 
amount  we  endorse  on  the  note.     (See  109.)     Posted  to  618. 

Ex.  489. — If  we  are  in  need  of  money,  we  take  a  note  to  the  bank  and  get 
it  discounted, — the  entry  is  then  made  in  this  manner.  This  note  is  made 
without  interest, iSo  the  bank  deducts  85^  cents  (see  509)  and  hands  us  the  bal- 
ance, or  gives  us  credit  in  our  bank  book,  for  the  same.  The}-  deduct  the 
discount  at  a  certain  percent,  per  annum  for  the  time  the  note  has  yet  to  run 
before  due — in  this  case  8  per  cent,  for  19  days.  We  must  in  all  such  cases 
credit  Bills  Receivable  for  the  full  face  of  the  note,  and  debit  Interest  on  the 
opposite  side  of  the  Cash  Book  for  the  discount.  (See  no,  125,  146  and  153.) 
489  posted  to  619. 

Ex.  489.V— Bennett  gives  us  a  check  on  the  bank  as  part  payment  for  his 
account.     (See  169,  80  and  81.)     Posted  to  695. 

.  Ex.  490  and  512. — Same  as  489  and  509.     Posted  to  620. 

Ex.  491.— The  N.  Y.  C.  &  H.  R.  R'y  Co.  return  this  amount  of  overcharge 
on  a  freight  bill  of  recent  date.  As  we  made  no  charge  on  the  Journal  at  the 
time  we  claimed  this  overcharge,  we  now  credit  it  to  Freight  &  Express. 
(See  206.)     Posted  to  650. 

Ex.  492. — On  the  6th  inst.  we  drew  on  Miller  at  sight,  through  our  bank, 
for  the  amount  of  his  account.  Our  bank  this  day  advises  us  that  the  draft  is 
paid,  and  enters  in  our  bank  book  the  amount  to  our  credit.  We  now  add 
this  to  the  amount  we  have  on  deposit  in  the  bank  on  the  stub  of  our  check- 
book, which  is  the  same  in  effect  as  making  a  deposit  of  that  amount.  (See 
170,  47  and  143.)     Posted  to  703. 

Ex.  493  and  494. — The  note  which  Smith  gave  to  Emerson  on  Nov.  14th, 
at  30  days,  for  $1,000,  and  was  by  Emerson  endorsed  over  to  the  firm  on  Dec 
1st,  is  now  due.  Smith  is  unable  to  pay  more  than  $500  and  the  interest 
accrued  to  date — $7.33;  he  therefore  wishes  to  renew  the  remaining  $500  for 
15  days.  He  pays  $507.33  cash,  which  is  entered  in  the  manner  indicated  in 
493  and  494,  and  then  writes  a  new  note  for  $500  at  15  days,  gets  the  same 
person  he  had  on  the  old  note  to  endorse  for  him,  and  hands  this  note  to  us; 
we  then  surrender  the  old  note.  No  entry  need  be  made  for  the  new  note; 
but  it  mav  He  allowed  to  appear  in   the  books  as  so  much  still   remaining 

91 


Ex. 
495 


510 


THE    EXPLANATION. 

unpaid  on  the  old  note, — the  only  record  of  the  renewal  being  made  in  the 
Bills  Receivable  and  Bills  Payable  Book.  (See  124  and  153.)  Posted  to  622 
and  665.  The  object  in  taking  a  new  note  instead  of  endorsing  the  payment 
on  the  back  and  holding  the  old  note,  is  in  order  that  we  may  use  the  new,  to 
get  it  discounted  if  we  wish. 

Ex.  495  and  496. — This  note  is  made  with  interest,  and  as  the  rate  per 
cent,  is  satisfactory  to  the  bank,  instead  of  deducting  a  discount,  the}-  allow 
us  for  the  interest  which  has  already  accrued  on  the  note  to  date,  and  give  us 
credit  for  the  face  of  the  note — $200 — and  this  accrued  interest — J?)  cents. 
The  interest  is  in  this  case  calculated  from  the  date  of  the  note  to  the  time  it 
is  discounted, — from  Dec.  3d  to  Dec.  20th — 17  days.  (See  125.)  Posted  to 
623  and  666. 

Ex.  497,  498  and  534. — We  sold  Bennett  and  Cameron  goods  on  Dec.  17th 
and  2 1  St,  on  terms  60  days,  or  2  per  cent,  off  for  cash  within  6  days.  On  Dec. 
23d,  they  deduct  2  per  cent,  from  their  bills  and  pay  us  the  balance.  We  give 
them  credit  for  the  full  amount  of  the  bills  and  debit  Merchandise  on  the 
opposite  page.     (See  534  and  74.)     497  and  498  posted  to  699  and  746. 

Ex.  499. — Cole  pays  us  the  amount  due,  and,  as  his  is  a  petty  account,  it  is 
treated  in  the  manner  described  in  paragraph  327.     Posted  to  744. 

Ex.  500. — This  is  the  amount  we  received  from  Hurto  when  we  compro- 
mised with  him  for  a  full  settlement  at  60  cents  on  the  dollar.  (See  450,  451.) 
Posted  to  689. 

Ex.  501.  They  pay  the  amount  of  our  claim  against  them.  (See  393-394.) 
Posted  to  743. 

Ex.  502. — Same  as  491.     Posted  to  650. 

Ex.  503. — Same  as  499.     Posted  to  745. 

Ex.  504. — Our  attorney  makes  a  collection  on  Dorman's  account,  and 
hands  the  same  over  to  us.     (See  263.)     Posted  to  686. 

Ex.  505. — When  we  borrow  money  and  immediately  give  our  note  for  the 
same,  the  entry  is  made  in  the  manner  here  illustrated.     Posted  to  642. 

CREDIT    SIDE. 

Ex.  506. — We  give  our  landlord  a  check  for  the  month's  rent  of  our  store. 
A  "Rent"  account  is  sometimes  kept,  so  as  to  show  how  much  has  been  ex- 
pended during  the  year  for  rent;  but  in  this  case  it  is  carried  into  the  Expense 
account.  (Sec  190  and  194.)  All  items  we  wish  charged  to  the  Expense 
account  we  extend  into  the  "Expense  Dr."  column,  and  at  the  end  of  the 
month  post  the  total  for  the  month  in  one  entry.     (See  Ex.  483.) 

Ex.  507. — We  buy  a  set  of  blank  books,  some  letter  paper,  envelopes,  etc. 

Ex.  508. — We  procure  $3,000  insurance  on  our  stock  of  goods  and  fixtures 
in  the  /Etna  Insurance  Co.,  and  pay  \  per  cent,  premium  on  the  policy. 
(See  187  and  188.)     Posted  to  656. 

lix.  509.— See  Ex.  488.     Posted  to  660. 

Ex.  510.— Goodwin  draws  $10  for  his  private  use.  (See  57.)  Posted  to 
571.  It  is  not  necessary  to  add  "Private  account"  after  his  name,  as  it  is  so 
understood. 

92 


THK    EXPLANATION. 

Ex.  511. — We  have  a  new  counter  made,  and  i)ay'  cash  therefor.  (See  93.) 
Posted  to  593. 

Ex.  512. — See  Ex.  490.     Posted  to  661. 

Ex.  513. — Emerson  draws  $15  for  his  private  use.  (Same  as  510.)  Posted 
to  576. 

Ex.  514. — We  buy  a  new  desk  and  chair  for  our  office  use.     Posted  to  594. 

Ex.  515. — We  pay  these  freight  bills.  There  is  an  overcharge  on  each, — 
the  overcharge  on  the  former  we  charge  on  the  Journal  (see  393);  on  the 
latter  we  simply  make  a  memorandum  of  the  claim,  as  we  are  not  certain 
whether  or  not  it  will  be  allowed.  It  is,  however,  paid  on  the  loth  inst. 
(See  491.)     Posted  to  649. 

Ex.  5  16. — It  is  the  end  of  the  week,  and  we  pay  our  employes  the  amount 
due  to  each.     (See  latter  part  of  paragraph  336.)     Posted  to  652. 

Ex.  517. — We  purchase  five  bank  shares  of  the  Union  Trust  Co.  stock. 
We  buy  these  because  we  have  money  to  spare,  and  think  it  a  good  invest- 
ment as  this  bank  declares  a  semi-annual  dividend  to  its  shareholders,  the 
per  cent,  of  which  amounts  to  more  than  our  money  would  bring  if  put  out  on 
interest.  When  we  receive  cash  on  a  dividend,  wc  open  a  "Union  Trust  Co. 
Dividend"  account,  and  credit  that  account  for  the  amount  of  the  dividend; 
which  "Dividend"  account  is  closed  at  the  end  of  the  year  and  the  amount 
carried  to  the  Loss  &  Gain  account  as  a  Gain.     Posted  10676. 

Ex.  518. — We  have  a  sign  made  to  put  up  over  our  door.  Some  book- 
keepers erroneously  charge  this  to  Store  Fixtures  account.  Nothing  should 
be  charged  to  Store  Fixtures  account  except  such  articles  as  would  be  of 
value  to  others. 

Ex.  519. — We  buy  potatoes  from  a  farmer  and  pay  cash  therefor.  Every- 
thing we  buy  for  the  purpose  of  selling  again,  wc  debit  to  Merchandise 
account.     Posted  to  585. 

Ex.  520. — We  pay  for  freight  and  drayage,  also  for  express  on  a  box  of 
goods.  (See  205.)  A  separate  account  is  sometimes  kept  for  Drayage,  but  in 
this  set  it  is  carried  into  the  Freight  &  Express  account.     Posted  to  649. 

Ex.  521.— We  go  to  the  bank  and  buy  a  draft  (bank  draft)  on  New  York 
and  send  it  to  the  Catlin  Tobacco  Co.     (See  179.)     Posted  to  747. 

Ex.  522.— Same  as  516.  (See  201  and  203.)  Posted  to  653.  In  a  store 
where  there  are  but  few  employes  it  is  not  necessary  to  write  the  initials 
when  making  the  entry. 

Ex.  523. — The  bank  charges  us  25  cents  for  collecting  our  sight  draft  on 
F.  H.  Miller.      (See  492  and  209.)     Posted  to  669. 

Ex.  524  and  525. — The  time  draft  which  Arbuckle  Bros,  drew  on  Goodwin 
Nov.  13th,  and  was  by  him  accepted,  is  now  due,  and  is  sent  by  them  through 
the  bank  for  collection.  The  bank  presents  it  to  us  for  payment,  and  we  pay 
it,  together  with  65  cents  exchange  and  collection  charges.  (See  361  and 
134.)      Posted  to  629  and  670. 

Ex.  526. — We  pay  for  circulars,  and  for  advertisement  in  "Tribune," — 
desiring  to  know  how  much  is  expended  during  the  year  for  advertising,  we 

93 


Ex. 
511 


THE   EXPLANATION. 

keep  an  Advertising  account  and  ch'arge  the  amount  to  that  account.  Posted 
to  674. 

Ex.  527  and  528. — Baker  &  Co.,  of  New  York,  draw  on  us  "at  sight,"  on 
Dec.  13th,  for  the  amount  of  their  account,  the  draft  reaches  us  on  the  15th, 
is  "accepted,"  and  after  the  three  days  of  grace  is  now  due.  We  pay  it, 
together  with  30  cents  exchange.    (See  180  and  143.)    Posted  to  752  and  671. 

Ex.  529. — We  buy  coal  for  our  own  use  in  the  store,  and  as  we  keep  no 
Fuel  account,  the  amount  is  charged  to  Expense.     (See  189  and  194-) 

Ex.  530. — Russell's  note,  dated  Oct.  20th,  at  60  days,  is  now  due  and  he  is 
unable  to  pay  it.  We  discounted  it  in  the  bank  on  the  3d  inst.  (see  4S9),  and 
we  are  now  obliged  to  take  it  up.  This  note  was  made  without  interest;  if  it 
had  been  made  with  interest,  we  would  be  obliged  to  pay  the  bank  the  face 
of  the  note  phis  the  interest;  we  would  then  debit  Bi'ls  Receivable  for  the 
face  of  the  note  and  Interest  for  the  amount  of  accrued  jjjnterest.  (See  126.) 
Posted  to  612. 

Ex.  531,  532  and  533. — The  note  Goodwin  gave  to  Thurber  &  Co.,  dated 
Oct.  22d,  at  60  days,  will  be  due  on  the  24th  inst.,  and  as  it  is  made  payable 
at  their  office  in  New  York,  we  this  day  buy  a  bank  draft  for  $505.25,  for  the 
face  of  the  note  and  interest,  (the  note  was  made  with  interest)  and  send  it 
to  them  so  it  will  reach  them  on  the  day  the  note  is  due.  We  pay  exchange 
on  the  draft,  50  cents.  (See  362,  134,  144  and  209.)  Posted  to  630.  662 
and  672. 

Ex.  534.— See  Ex.  497  and  498.     Posted  to  585. 

Ex.  535,  537  and  539. — These  employes  draw  money  on  their  accounts. 
(See  204  and  latter  part  of  paragraph  337.)     Posted  to  680,  682  and  678. 

Ex.  536  and  540. — Emerson  and  Goodwin  draw  money  for  their  pri\ate 
use.     Posted  to  580  and  572. 

Ex.  S41. — Goodwin  instructs  the  book-keeper  to  pay  for  a  pair  of  shoes 
which  the  shoe-maker  brings  in  with  a  bill  for  same.  The  shoes  are  for 
Goodwin's  private  use,  therefore  the  amount  is  charged  to  his  account- 
Posted  to  573. 

Ex.  542. — We  loan  J.  Huggins,  on  his  note  at  60  days,  with  interest  at  8 
per  cent.,  $100.     (See  108.)     Posted  to  616. 

Ex.  543.— We  make  a  payment  of  $50  on  the  note  we  gave  to  the  H.  S.  & 
L.  Co.  We  debit  Bills  Payable  for  the  amount  of  that  payment,  which 
amount  is  by  them  endorsed  on  the  note.     (See  134.)     Posted  to  631. 

Ex.  544.— We  give  Armsby  a  check  on  our  bank  for  the  balance  of  his 
account.     (See  179.)     Posted  to  765. 

Ex.  546. — We  pay  for  Emerson  his  private  gas  bill.     Posted  to  581. 

CLOSING   THE   CA.SH    BOOK. 

Ex.  547. — It  is  now  the  end  of  the  month,  and  we  wish  to  close  or  balance 
the  Cash  Book.  First.— V\ViA  the  total  of  the  "Mdse.  Cr."  column,  then  bring 
that  total  into  the  "Miscellaneous  Cr."  column,  which  amount  is  the  total 
sales  for  the  month.      Posted  to  589. 

94 


El. 

548 


THE   EXPLANATION. 

Ex.  548. — Second. — Find  the  total  of  the  "Miscellaneous  Cr."  column,  (in- 
cluding the  Mdsc.  Cr.  amount)  the  amount  of  which  is  the  total  cask  received 
during  the  month,  and  this  amount  is  then  extended  into  the  "Total"  column. 

Ex.  549. —  Third. — Add  the  amount  on  hand  at  the  beginning  of  the  month, 
$3,000,  and  the  total  received  which  gives  the  total  Cash  debit. 

Ex.  550. — Fourth. — Find  the  total  of  the  "Expense  Dr."  column  and  bring 
that  total  into  the  "Miscellaneous  Dr."  column.      Posted  to  645. 

Ex.  551.— /■/////.— Find  the  total  of  the  "Miscellaneous  Dr."  column,  which 
amount  is  the  total  cash  paid  out  during  the  month,  or  total  Cash  credit. 

Ex.  553.— 5/J.-/A.— Find  the  difference  between  the  total  Cash  credit  (550' 
and  the  total  Cash  debit  (549),  which  difference  is  the  balance  of  cash  remain- 
ing on  hand.  Now  write,  in  red  ink,  "Balance  on  hand"  and  extend  the 
amount  into  the  "Total"  column  under  the  total  amount  paid  out. 

Ex.  y:,i.—Seventh.—Add  the  total  paid  (551),  and  the  balance  now  on 
hand  (552),  and  place  the  total  below  (553),  which  total  should  just  agree  with 
the  total  on  the  opposite  side  of  the  Cash  Book. 

Ruling.— The  red  lines  should  first  be  ruled  in  the  manner  here  illustrated. 
The  double  red  lines  should  always  extend  across  both  pages  on  the  same  line; 
therefore  we  always  rule  first  the  page  that  extends  the  lowest  down,  then 
rule  the  opposite  page  to  correspond. 

Ex.  554.— After  the  Cash  Book  has  thus  been  balanced,  we  bring  down  on 
the  debit  side  of  the  book  the  balance  of  cash  on  hand  for  the  beginning  of 
the  new  month.  We  then  proceed  in  the  same  manner  as  in  the  preceding 
month.     547  posted  to  589.     550  posted  to  645. 

Remarks.— When  there  are  a  great  many  entries  in  the  Cash  Book  every- 
day, it  is  advisable  to  balance  it  daily;  then  the  extra  columns,  "Mdse.  Cr." 
and  "Expense  Dr."  could  not  be  used.  When  they  are  not  used,  there  are  but 
two  money  columns  on  each  side  of  the  Cash  Book,— in  reality,  a  common 
Journal  ruling.  The  items  that  are  here  entered  in  the  extra  columns  would 
then  be  entered  in  the  inner,  or  general  column,  and  the  book  would  be  other- 
wise treated  the  same  as  though  these  columns  were  here  stricken  out— the 
Mdse.  and  Expense  items  being  posted  to  their  respective  accounts  the  same 
as  the  other  items. 


534 


95 


555 

TO 

591 


40. 


THE  ILLUSTRATION. 

LEDGER. 
J.  H.  Goodwin — Stock  Account. 


568. 

sk 

,SSo.   : 

6.    {                 656. 

:,:,:. 

5 

.IS. 

.88of 
5«4.       Dec.        1 
666.                  31 

660. 

Net  Investment, 
By   Net   Private 
Gain, 

d 

3.500 

62. 
00 

3' 

3-S1} 

3' 

By  Present  Won h. 

— 

3.57' 

?' 

6.6.     tn.^       . 

31 

S. 

A.  I 

:mers 

'"1 

i 

•Stock  Accoi'NT. 

hli7. 

,88o. 
Dec. 

31 

ToS.  A.E.Priv'te 

acc't;  net  loss, 
To  Balance. 

.r 

3.Jj'|   79' 

1880. 

o«».       Dec.        I 

■ 

Net  Investment, 

.. 

00 

3.500 

. 

1881. 
570.      Jan.        X 

Present  Worth. 

40 

3.=8. 

,.; 

7> 

J- 

H.  G 

OODWI 

N— j 

Private  Accc 

unt. 

Ilk 
573. 

i88o. 
Dec. 

Is 

ShofS, 

91 

9' 
9> 

00 

575.     b«:!    31 

By  H  Net  Gain. 

5J4. 

'' 

ToI.H.C.o.nhv.n, 

3" 

_ 

S. 

A.E 

ilERSO 

UNT. 

3, 

N— 

Private  Accc 

670. 

lU: 

570. 

d\\°- 

'7 

31 

M. 
Gas  bill, 

f'S 

32s 

i 

1 880. 

58^     Dec.     3. 

1:,    '.   N-M.    ,. 

•ii 

3" 



^ 

350 

Me 

5'  1 

330 

." 

RCl 

^NDISE. 

ttf^ 

i88o. 
Dci;. 

.1 

ao.oo;  1.48, 

1 

rs 

.880. 

1^  °-;  11 

Cash  sales, 
rJy°1nven,ory, 

% 

1    - 

686. 
587. 

3> 

Journa"       ^^^ 
To  Loss  &  b^i'' 

To  Inventory. 

65 

•17 

i 

^ 

591.                '' 

^"^^ 

io 

A 17 

S^SSJ    S8 

i-- 

^ 

B8». 

7 

\ 

96 


THK   ILLUSTRATION. 


593 

TO 

643 


LEDGER. 


41. 


Store  and  Office  Fixtures. 


35- 

5. 

S8 

598.  Jan'y 

To  Inventory 

338 

■ 

BlLL^    Rj 

;CEIVABLE. 

1 

001. 

iSSo. 

!               1880. 

602.  Dec. 

I 

Russell. 

62 

200 

618.  Dec. 

3     Russell,         r.-3o.  P 

60:1. 

.-«o 

62 

619. 

ml: 

0-60 

62 

200 

620. 

6           "                ii-6o.'U. 

UU.i. 

Porter, 

1-30 

62 

240 

621. 

17      Fisher.  10-60,  H.L.R. 

606. 

Fisher, 

0-60 

62 

Atfy. 

607. 

H.  Smith, 

1-30 

62 

1000 

622. 

H.  Smith.      10-30,  P. 

608. 

Bennett. 

2-90 

62 

628. 

609. 

,, 

Richardson, 

63 

190 

624. 

21  1    R'usseli;        1-30.R. 

610. 

Russell. 

30 

64 

62'>. 

f^'      fPSKrCs.aiKM'P-'l'*- 

611. 

60 

64 

'78  23 

626. 

612. 

32 

10-60, 1 

.up 

9' 

200 

627. 

61». 

23 

Porter, 

2.60 

64 

241  1  76 

814. 

4 

Burgess, 

6a 

64 

39     °3 

615. 

Lyman, 
rfuggins. 

30 

64 

94 

016. 

iS 

9" 

iOQ. 

:' 

i88i 

617.  Jan'y 

B.tl. 

"449 

Bii 

,S    ] 

*AYABLE. 

1 

628. 

"' 

i88o. 

.880. 

629.    Dec.      i6 

Arbuckle, 

tfS3.  Dec. 

.1     Arbuckle,             ..-30 

030.                == 

Thurber,' 

0-60 

qi 

5J0    00 

6M. 

I  1    Thurber,              10-60 

631.                30 

Hall's  S.&L.CO. 

2-30 

9' 

so  ■  00 

636. 

S'    Arbuckle,             12-60 

B.1I. 

4' 

U««     »H 

636. 

13;    Hall's  S.&L.  Co.   30 

632. 

1 

617. 

038. 

,4      Procter  &G.            60 
23      Sprague.                     30 
.t,    Arbuckle,                  60 

(ii(i! 

Babbitt,                      30 
Catlni,                   11-60 

lit-.'. 

J I       leele.                    13-30 

10(2    01 

gasa 

^ 

043.  Jan'y 

I                 Bal. 

63 

63 

64 

64 

64 

90 

97 


044 

TO 

673 


42. 


THE  ILLUSTRATION. 

LEDGER. 

Expense. 


644.    Dec.         i      To  Inventory, 


iSSi. 

646.   J.n'y 

' 

849.    Dec. 

7 

i860. 

652.    Dec. 

7 

658. 

664. 

^' 

1880. 

656.     Dec. 

3 

= 

857.   Jan'y 

660.    Dec. 

1 

661. 

662. 

2a 

(•,(!». 

Freight  aiid  Express. 


650.  Dec. 
651. 


To  Loss  and  Ga 


I.o^s  and  Gain. 


IlJSUiiANCE 


604.  Dec.        8 


;OIi^ECTIO|N   4JND    EXCH 
673. 


62 1 ;  2 

90  1 

Si  ' 

64  I 


3>      By  Loss  and  Gain.  47 


q8 


Ex. 
555 

TIIK    i:\iM.ANAriON.  TO 

627 

EXPLANATION  OF  Till'.  Ll-DGER. 

THE   COLUMNS. 

Ex.  555  and  559. — These  are  the  date  coUimns.  The  dates  entered  herein 
are  taken  from  the  Journal  and  Cash  Book,  or  whatever  books  we  post  from. 

Ex.  556  and  560. — These  are  the  "explanation  columns"  referred  to  in  323 
and  324. 

Ex.  557  and  561. — These  are  the  columns  in  which  we  indicate  the  Journal 
or  Cash  Book  pages  from  which  a  transaction  is  posted  or  transferred.  By 
thus  entering  on  an  account  the  Journal  or  Cash  Book  page  upon  which  a 
transaction  may  be  found  recorded  in  detail,  it  is  not  necessary  to  write  any 
explanations  on  this  book,  excepting  the  few  instances  that  will  be  noticed 
on  the  accounts  herein. 

Ex.  558  and  562.— These  are  the  debit  and  credit  money  columns. 

Now  read  Par.  15  to  ig;  also  32 1  to  330. 

THE   ACCOUNTS. 

Ex.  563  to  570. — See  49  to  56.  (This  set  of  books  is  closed  according  to 
dosing  No.  I.)  It  will  be  seen  that  Goodwin  has  a  net  private  gain,  while 
Emerson  has  a  net  private  loss:  thus  illustrating  to  the  student  the  different 
■ways  of  treating  the  Stock  accounts  in  such  cases. 

Ex.  571  to  583.— See  57  to  65.  It  will  be  seen  in  575  and  582  that  each  of 
the  partners  is  credited  with  equal  shares  of  the  net  business  gain.  Goodwin 
has  drawn  less  (571,  2  and  3)  for  his  private  use  than  his  net  business  gains 
amounted  to,  therefore  he  has  a  net  private  gain  (See  62).  It  does  not  matter 
whether  or  not  a  salary  is  allowed— the  account  is  treated  the  same,  as  will  be 
seen  in  this  case  where  none  is  allowed.  Emerson  has  drawn  more  for  his 
private  use  than  his  net  business  gain  amounted  to,  therefore  his  is  a  net 
private  loss.     (See  63.) 

Ex.  584  to  591.— See  66  to  74. 

Ex.  592  to  600.— See  92  to  96. 

Ex.  601  and  628.— See  322.  In  business  colleges  601  is  the  style  of  ruling 
that  is  used  under  the  Ledger  headings.  Some  book-keepers  also  use  this;  but 
if  any  ruling  is  used  the  style  under  "Bills  Payable"  (628)  is  recommended,  as 
it  requires  less  time  to  rule  it  and  is  not  so  "fussy."  These  rulings  are  used 
here  simply  to  show  the  different  styles. 

Ex.602  to  627.— See  107  to  128.  Some  book-keepers  do  not  insert  the 
two  ciphers  in  the  "cents"  column  in  their  books  when  there  are  no  cents,  but 
J-ave  the  column  blank  as  has  been  done  in  this  Bills  Receivable  account. 
When  an  item  is  posted  to  this  account,  do  not  write  in  that  formal  business- 
college  way  "To  Ed.  Russell"  when  a  note  is  received,  or  "By  Cash"  when  it 
is  paid;  but  simply  write  as  in  602  and  618  the  person's  surname  (Russell), 
the  month  in  which  the  note  is  dated,  (nth  or  Nov.)  the  number  of  days  upon 
which  it  is  drawn  (30),  the  page  (62),  and  the  amount  ($200).     And  when  a 


674 
690 


43. 


THE    ILLUSTRATION. 

LEDGER. 
Advertising. 


,880.1 

1880. 

"~ 

674.    D«. 

^7 

91 

16 

00 

675.  D«c. 

^' 

By  Lou  &  Gain, 

47 

•  6      00 

= 

-^ 









. 

T 

Jni 

N    T 

RU£ 

•  Co.  ShLre 

1 

S. 

i88o. 
676.     Dec. 

9 

5  Shares. 

9. 

500 

00 

1 

1 

1 

M.-W 

^  5 

IXTO 

N— 

Salary  ^50 

Mo.) 

677.   Dec. 

3. 

Mo.  Dec. 

i 

James 

K 

JSEL 

1.A- 

(Salary 

$4 

3  Mo.) 

i88o. 

• 

6J8.     Dec. 

9' 

rl 

670.    Dec]    31 

Mo.  Dec, 

Fran 

C    I 

Ma 

k 

(Salary  !S4< 

>  Mo.) 

.880. 

.88, 

680.    Dec. 

24 

91 

,. 

00 

CSl.    Dec 

31 

Mo.  Dec- 

65 

HER^ 

IAN 

Smh 

»- 

[Salary 

Si; 

Mo.) 

1 

i88o. 

.88d. 

( 

082.    Dec.     34 

9" 

5 

00 

683.   Dec.    31 

1 

Mo.  Dec. 

6^ 

i      50 

H. 

L. 

Rich 

ARI 

SON,  Attorney. 

1880. 

.S80 

684.    Dec. 

■7 

S.  A.  Fisher's  Note, 

63 

.00 

00 

686.    Dec. 

29 

Dorman  acc't, 

9< 

- 

00 

685. 

Wm.  Dorman  acc't, 

64 

\z 

-■ 

6S7. 

3> 

••       called  w.,r.hle«. 

«5 

*'.~. 

Sam'H' 

RTO, 

19 

N.  La 

5AL 

LE  St. 

1880. 

j 

■  8S< 

■ 

ess.    Dec. 

, 

Balance.                           1     62 

i6a 

so 

089.  Dec.    27 

60  per  cl.  cash. 

90 

97 

50 

600. 

Lost  A.  &  N.  40  per  cl.. 

6s 

65 

00 



\ 

— Tn 

— 

16a 

50 

^ 

JO 

THE  ILLUSTRATiW.. 


727 


44. 


LEDGER. 
George  W.  Bennett. — 212  Prairie  Ave. 


1880. 

704.    Dec 


;i6. 

17 

717. 

718. 

1880. 

718. 

Dec.  :  13 

724. 

«7 

7So. 

31 

MllLLER. —    (AVENPORJl-,     [OWA. 


Frank  ILici- ardSon 


Edward  1[ 


Alex.  Dollus. — 416 


3      55 

23        40 

34    9« 


23        liorcland's  order, 
23   ■ 

;  s8    M. 


i88a. 
706.    Dec 


70S.    Dec 

-WILMI^GTbN,  III. 


Ace.  go  ds   12-8. 


•85    So.    ROBEY    St. 


710.    Dec 
711. 
712. 
71S. 


W  Washington  St. 


719.    Dec. 
720. 


RGEiis.-  r26  Calumet  Ave 


r88oJ 


Making  ShelTca* 


64 1| 

'd 


728 

TO 

753 


45. 


•THE  ILLUSTRATION, 

LEDGER. 
W.  C.  Lyman. — 73  Dearborn  Ave. 


— 

1 

I                 ! 

— 



j88o. 

1 

~ 

728. 
729. 

Dec. 

=4 

64 
64 

'7 

H 

730.  Dec.     2.      M. 

731.  1  27       Notejods, 

64 
64 

J 

94 

T.  W. 

K 

;ne. 

94 

-3 

AN  Ave. 

^ 



9^ 

3    MiCHK 

.880. 

732. 
73S. 

D«. 

24 

tl 

4S 

s 

Wy 

.  I 

ORM^ 

,N.- 

64  Park 

Ave. 

.880. 

1880. 

734. 

Dec. 

17 

63 

xoo 

00 

785.  Dec. 

=8      Acc't  to  H.  L.  Richard- 

ii_ 

100 

^ 

'ETT 

'  A 

COUNTS, 

,880. 

1880. 

736. 
737. 
738. 
73!>. 
740. 
741. 
74-2. 

Dec. 
1880. 

13 

17 

L.  S.  &  M.  S.  R'y. 
Buck,  R.  N.. 
Cole,  H.  S., 
Piper,  Adolph. 
Dickinson,  H.  M.. 
Goodwin,  B.,Jr.. 
Cameron,  D., 

Catlin 

63 

1 

64 
64 

To 

1 

5 

lACC 

40 

6s 
00 

)  c 

743.  Dec. 

744.  Dec. 

745.  Dec. 

746.  Dec. 

..—St.  L 

1880. 

=8 
=5 

=9 
=3 

OUI 

Paid, 
Paid. 

Paid. 
Paid! 

s,  Mo. 

9» 

90 

6 

S 
4a 

6 

747. 

748. 

Dec. 
.880. 

"3 

Acc'l  D'ft. 

Samuel 
B 

1: 

,KE 

'LES 
1     & 

40 

It 
& 

Co. 

1 

749.    Dec. 
760. 

:o.— St. 

1880. 

761.    Dec. 

-New  Y 

1880. 

>5 

Lo 

)RK 

Bal.. 
ii-a8,6o. 

IIS,   Mo, 
B.I., 

6a 

6> 

344 

> 

7B2. 

Dec. 

.8 

9' 

380 

763.    Dec. 

. 

Bal.. 

6a 

aSo 

CO 

46. 


THE  ILLUSTRATION. 

LEDGER. 
Arbuckle  Bros. — New  York. 


754 

TO 

783 


i88o.    \         ! 

754.  Dec.       8      Acc'tD-ft. 

755.  I S5      Note, 


758.    Dec.     25      Note^ 


761.    Dec.      14      Note, 


62        218 
64        146 


Bj  Ti  \  Babbitt  f— New  York 


Procter!  &  GamJ  le. — Cincinnati 


762.    Dec.        8       6ck 


J.  K.  ARii 


5      M.  62 

.5 ,  ■■  ;63 

23    I  Order  on  Bennett,  '23 


^prAgue^I  W^ 


156.   Dec.       3      60, 


BY   &    Co. 


BOR^LAND    & 


778.   Dec. 

779. 

780. 


Cq. 


:4 


63  28 

63  .7 
65 

«S  7 

63  89 


784 

TO 

805 


47. 


THE  ILLUSTRATION. 

LEDGER. 
Lost  Accounts  and  Notes. 


l83o.    ! 
784.     Dec.     3^      Sam.  Hurto, 

64 

6s      00  i 

1880. 

1                     1 

II           ' 

J8o.                    3t       Alex.  Dollus, 

65 

3= 

SI 

J86.                             W.  C.  Lyman,  Note, 

65     i        JO 

94 

187. 

W.  Dorman,  Acc't, 

65            .5 

-A 

- 

us 

45 

- 

_.'jj  45 

""^"^ 

Los 

3    A 

i 

D  Gain. 

1880. 

1880. 

V89.     Dec.      31       To   Store   and  O.  Fix- 

41       14 

so 

799.   Dec.      31      ByMdse. 

** 

785!     -5 

790.                          To  Expense. 

4»          -73 

45 

800. 

♦•i 

6     ,. 

791.                              "    Fr't  and  Express, 

4a''        =8 

45 

792.                              "  Salaries. 

4»         M5 

00 

793.                                 "    Insurance, 

<» 

50 

794.                              "•   Coll.  and  Exch., 

4» 

I      . 

70 

795.                                 ••    Advertising, 

43 

16 

00 

II 

796. 
797. 

••   Lost  Accounts  and 

47 

143 

45 

I 

1 

798. 

1 

To  S,  A.  Emerson,  Pri- 
vate Acc't. 

1  802. 

_6Z 

1           1    1 

"m 

5^^ 

am. 

80S. 

104 


TIIK   EXPLANATION. 

payment  is  made  on  this  note,  write  on  the  credit  side  of  the  account  when 
the  item  is  posted,  the  name,  month,  days,  page  and  amount,  the  ^ame  as  on 
the  debit  side — adding  after  the  days  "P.,"  "D."  or  "R.,"  so  that  we  may  know 
whether  "Payment,"  "Discounted"  or  "Renewed."  This  is  all  done  simply  for 
checking  purposes,  in  case  that  the  difference  between  the  two  sides  of  the 
account  should  not  agree  with  the  total  value  of  the  notes  we  actually  have 
on  hand.     (See  128.)     For  explanation  of  626,  see  271. 

E.x.  629  to  643. — See  129  to  140.  The  explanation  columns  are  treated  in 
this  account  in  the  same  manner  and  for  the  same  purpose  that  they  are 
treated  in  the  Bills  Receivable  account, — the  names,  etc.,  being  entered  simply 
for  checking  purposes.  (See  139.)  It  is  not  necessary  to  d^2V/tf  the  month  in 
the  explanation  column  but  allow  it  to  stand  until  changed  as  in  635  to  641. 
The  Bills  Receivable  and  Bills  Payable  accounts  are  usually  balanced  in  the 
manner  here  illustrated  only  when  the  page  is  full  and  we  wish  to  transfer  the 
account  to  a  new  page,  excepting  at  the  end  of  the  year,  at  which  time  it  is 
customary  to  close  them  and  bring  down  the  balances  in  this  manner.  (See 
308.) 

Ex.  644  to  648. — See  189  to   197. 

Ex.  649  to  651.  — See  205  to  208. 

Ex.  652  to  655. — See  201  to  204. 

Ex.  656  to  659.— See  187  and  188. 

Ex.  660  to  668. — See  144  to  154. 

Ex.  669  to  673.— See  209  to  212. 

Ex.  674  and  675. — See  Ex.  526  in  Cash  Book.  When  we  close  an  account 
upon  which  there  is  but  one  item,  as  in  this  case,  the  closing  lines  are  ruled 
in  the  manner  shown  under  this  account. 

E.x.  676.— See  E.x.  517  in  Cash  Book.  These  bank  shares  arc  by  us  con- 
sidered worth  now,  at  the  end  of  the  year,  just  what  they  cost,  and  as  we  have 
them  on  hand  in  our  safe  we  call  them  a  Resource,  therefore  allow  the  account 
to  stand  untouched.     (See  18.) 

Ex.  677  to  6S3. — These  are  accounts  with  our  employes,  and  the  balances, 
$25,  $5,  $8,  and  $2.50,  are  the  amounts  that  are  still  due  them  for  their  services, 
which  they  have  not  yet  drawn, — therefore  Liabilities  to  us,  the  same  as 
any  other  personal  accounts  we  owe.  It  is  customary  to  write  on  each  ac- 
count, in  the  manner  here  indicated,  the  salary  paid  to  each.  (See  latter  part 
of  paragraph  337.) 

Ex.  684  to  687. — See  262  to  264. 

Ex.  688  to  746.— See  164  to  173;  also  327. 

Ex.  694  and  701. — The  small  figures  in  the  money  columns  under  the 
amounts  throughout  this  Ledger  are  the  footings  of  those  columns;  and  in  the 
explanation  columns,  are  the  balances  that  existed  on  the  accounts  before  the 
books  were  closed;  consequently  are  the  balances  that  are  taken  in  the  first 
Trial  Balance.  (See  808.)  These  are  intended  to  illustrate  the  lead-pencil 
figures  referred  to  in  302. 

Ex.  747  to  783.— See  174  to   183. 

io5 


Ex. 
629 


783 


806 

809 


THE   ILLUSTRATION. 


Ex.  7S4  to  788.— See  265  to  274. 
Ex.  789  to  800. — See  275  to  308. 

Ex.  801  to  805. — These    are   the  "Closing  Lines"  referred   to  throughout 
"The  Foundation." 


806.   Inventory  of  Goodwin  and  Emerson's  Merchandise,  Store 
AND  Office  Fixtures,  etc.,  etc., — Taken  this  ist  day  of  Jan.,  1881. 


Merchandise. 

Store  &  Office  Fixtures. 

Expense  (Coal), 

Insurance  (Unexpired  Premium), 

807.  When  an  inventory  is  taken,  it  is  usually  made  in  a  book  ruled  in  the 
common  Journal  form  as  above  illustrated;  and  for  the  Merchandise,  of  course 
each  item  of  goods  we  have  in  the  store  is  extended  into  the  inner  column 
;,eparatel3-;  then  the  grand  total  is  finally  extended  into  the  outer  column. 
The  same  also  with  the  Store  and  Office  Fixtures,  as  well  as  anything  else 
we  may  have  of  value  on  hand  belonging  to  other  accounts. 

808.  Trial  Balance,— Taken  Dec.  31st,  1880. 


H 

Cash  Book,     1,        3776    5» 

I 

6= 

3500 

350    5= 

3500 

1427     25 

.062 

0+ 

352    so 

6 

52 

.449;   - 

=3 

188 

45 

i 

28 

4S 

8 

MS 

2 

50 

3oj 

344 

.J70 

I20 

16! 

37 

6S 

soo; 

01 

'7 

■ 

"S           1 

a|  01  ! 

S7     .2  1 

9,60 

41" 

3I.0 

■"!  45 1 

1    . 

867.1  38  1 

^     367-1 88 

809.  The  above  is  the  "figure"  Trial  Balance  referred  to  in  300  and  301. 
When  we  have  a  great  many  accounts,  wc  may  rule  extra  columns  on  the 
page  of  the  Trial  Balance  book,  so  as  to  have  nothing  but  debit  and  credit 
money  columns  on  the  book;  but  this  is  done  simplv  to  economize. 

106 


THE   ILLUSTRATION. 

810.   Trial  Balance,— Taken  Jan.  ist,  1881. 


810 

AND 

811 


H.  L.  Richardson, 
George  W.  Bennett. 
T.  W.  Kccnc. 
R.  N.  Buck. 
Adolph  Piper, 
H.  M.  Dickinson, 
M.  \V.  Saxton, 
James  Kinsella. 
Frank  P.  Mast. 
Herman  Smith, 
Sam'l  Cupplcs  &  Co., 


46 

B.  T.  Babbitt, 

l-o 

' 

Geo.  W.  Boreland  &  Co.. 

37      65 

Sprague,  Warner  &  Co.. 

1 

61    ,  17 

Total  Personal  Accounts  owing  us. 

r-ao. 

C4 

]                            ....              ..         „,5  o„.e_ 

«03 

3» 

90     1  Cash, 

1      3776 

SO 

40       Merchandise, 

40 

4.     j  Store  &  Office  Fi^ctures, 

338 

1  Bills  Receivable, 

M49 

02 

j  Bills  Payable, 

io6a 

04 

4a       Expense  (Fuel), 

«s 

1  Insurance  (Unexpired), 

=7 

50 

43       Union  Trust  Co.   Shares), 

Soo 

1  40     j  J.  H.  Goodwin-Present  Worth, 

157" 

1« 

!"■—  •■  •• 

3.8a 

79 

8SI9 

4« 

85.9 

4S 

811.  This  is  the  Trial  Balance  with  the  names  of  the  accounts,  referred 
to  in  301.  This  kind  of  a  Trial  Balance  is  a  sufficient  "Balance  Sheet"  (see 
latter  part  of  paragraph  303)  to  satisfy  any  business  man;  but  as  such  a  Trial 
Balance  is  required  only  once  a  year,  the  book-keeper  can  well  afford  to  spare 
time  enough  to  make  out  for  the  firm  a  "Yearly  Statement"  in  the  manner 
hereafter  illustrated,  which  cannot  help  but  prove  sufficiently  clear  and  plain 
to  satisfy  the  most  fastidious.  (See  812  to  818.)  In  taking  the  above  Trial 
Balance,  it  will  be  seen  that  the  personal  accounts  from  the  Ledger  are  first 
taken,  then  the  cash  balance  from  the  Cash  Book,  then  the  remaining 
accounts  in  the  Ledger, —  last  of  all  the  partners' Stock  accounts.  (See  296, 
297  and  298.)  After  the  Trial  Balance  has  been  taken  the  Yearly  Statement 
is  then  made,  the  items  of  which  are  taken  from  the  Trial  Balance  for  the 
Assets  and  Liabilities  (see  812),  and  from  the  Loss  &  Gain  account  in  the 
Ledger  5or  the  Losses  and  Gains.  (See  813.)  The  Partners'  Individual  State- 
ments are  made  from  the  Stock  and  Private  accounts  of  each  of  the  partners. 
(See  814.) 


M2 

TO 

8U 


THE    ILLUSTRATION. 


812.   Yearly  Statement— Goodwin  &  Emerson,— Jan.  ist, 


Assets. 

Personal  Accounts  owing  us. 
Bills  Receivable— Noles  on  hand, 

aoi 
1449 

04 

1 

Cash  on  hand. 

3776 

50 

Merchandise  on  hand  (per  inventory). 

Store  &  Office  Fixtures  on  hand  (per  inventory). 

„8 

Coal  on  hand,                                                                                                                  , 

IS 

1    Insurance  (Unexpired). 

50 

Union  Trust  Co.  (Shares), 

Soo 

Liabilities. 

Personal  Accounts  we  owe, 

603      3:, 

Kills  Payable— Notes  »-e  owe. 

1062      04 

Prc^cnl  \V..r:h  of  F,rm,  Jan'y  .St.   l88t. 

6854      «> 

.s. 

46 

i      85.9      46 

(See  810.) 

813.  Yearly  Statement,  continued— Goodwin  &  Emerson, — Jan 
1st,  i88i. 


Store  &  Office  Fixtures, 
Freight  &  E.xpress. 

Collection  &  Exchange, 

Lost  Accounts  &  Notes. 

Net  Gain  for  Firm.  Jan'y  itu  1 


785 

6 

,4 

50 

'73. 

4.'> 

28 

45 

■45 

00 

j6 

■43 

45 

(See  789  to  800.) 

814.   Partners'  Individual  Statements, — ^Jan.  ist,  il 


J,  H.  Goodwin. 

1  Net  Worth,  Dec.  ist.  1880. 
One-halfNetGain.Jan.  ist,  .88., 

Less  amount  drawn  for  private  use— per  private  account. 
Net  Pnv».e  Gaiu 

Present  Worth,  Jan.  ist.  188.. 

'33    i3« 

3500 

7' 

357" 

- 

' 

3" 

(See  563  to  566  and  571  to  575.) 

S.  A.  Emerson. 

Net  Worth,  Dec.  ist.  1880. 

Amount  drawn  for  private  use— per  private  account, 

One-halfNetGain.Jan.  ist.  .88., 

Present  Worth,  Jan.  tst.  iSBi. 

350 
133 

S» 

3< 

3500 

•• 

(See  567  to  570.  and  576  to  583.) 


108 


TllK    ILLUSTRATION. 


815 

TO 

818 


815. 

Sai 

.ES 

.....     1 

.».     j 

.... 

... 

.885. 

18S6. 

1887. 

January. 
February, 
March. 

1 

1 

1      I 

1 

Total  for  ihe  year,       , 

_ 



__ 

816.    In  order  to  present  to  the  firm,  in  a  compact  form,  a  statement  of 

the  monthly  sales,  in  such -a  way  that  the  sales  for  one  month  or  year  may  be 
compared  with  the  sales  of  another,  the  above  form  is  recommended.  This 
form  is  continued  in  length  for  the  twelve  months  of  the  year,  and  in  width 
for  as  many  years  as  there  can  be  money  columns  made  on  the  page;  or  if  be- 
gun on  the  left-hand  page  of  the  book,  it  may  be  extended  across  both  pages. 
When  this  statement  is  made,  the  total  sales  (cash  and  on-account)  are,  at  the 
end  of  each  month,  here  recorded.  A  statement  of  the  firm's  Expenses  may 
be  made  in  the  same  manner;  but  this  requires  more  labor,  as  it  necessitates 
the  making,  first,  of  an  itemized  statement  of  the  expenses. 


817.                       Proportion  of  Gain 

TO  Sales. 

1880.          1881. 

1882.         1883. 

1884. 

.885. 

Proportion  of  Cross  Cain  to  Sales.                    25.8  per  cent. 
Proportion  of  Net  Gain  to  Sales.                    i  8.76  per  cent^ 

1 

818.  The  foregoing  is  a  statement  easily  made,  and  proves  one  of  great 
importance  and  satisfaction  to  the  business  man:  since  he  can  therefrom  com- 
pare one  year  with  another,  the  proportion  of  the  gross  and  of  the  net  gain  to 
the  sales.  This  statement  is  made  only  at  the  end  of  the  year  after  the  books 
have  been  closed.  The  proportion  of  the  gross  gain  is  then  found  by  adding 
two  ciphers  to  the  gain  on  Merchandise,  and  dividing  this  amount  by  the  total 
Merchandise  sales  for  the  year — which  in  this  set  of  books  would  be  as  follows: 
3,043.18)  78,515.00  (25jV  per  cent.  (See  587  and  amount  in  small  figures  under 
590.)  The  proportion  of  the  net  gain  is  then  found  by  adding  two  ciphers  to 
the  net  business  gain  (found  on  the  Loss  &  Gain  account)  and  dividing  that 
amount  hy  t\\e  total  Merchandise  sales  for  the  year, — which  in  this  set  is  as 
follows:  304318)  2666200  (SyVV  per  cent.    (See  797, 798  and  amount  under  590.) 


109 


DOUBLE  ENTRY  BOOKKEEPING. 


STOCK  COMPANIES. 


819.  Organization. — When  a  stock  company  is  organized,  it  is  done  hy 
several  persons  coming  together  and  making  a  certificate  to  the  effect  that 
they  propose  to  form  a  corporation  to  bear  a  certain  name,  for  the  purpose  of 
transacting  a  certain  kind  of  business  at  a  certain  place;  and  that  they  pro- 
pose to  issue  a  certain  number  of  shares  at  a  certain  price  per  share;  that  the 
capital  stock  of  the  corporation  is  to  be  a  certain  amount;  and  the  duration 
of  the  corporation  a  certain  period  of  time.  This  certificate  is  filed  in  the 
office  of  the  Secretary  of  State,  whereupon  he  issues  a  License  to  the  persons 
making  such  certificate,  giving  them  permission  to  open  books  for  subscription 
to  the  capital  stock  of  such  corporation. 

A  subscription  book  is  then  opened  and  the  shares  of  the  company  are  dis- 
posed of  by  subscription, — the  persons  subscribing  paying  ten  per  cent,  down, 
and  the  balance  afterward  at  such  times  and  in  such  payments  as  the  b\--laws, 
hereafter  to  be  made,  may  designate. 

After  one-half  of  the  capital  stock  has  been  subscribed  for,  a  meeting  of 
the  subscribers,  is  called  and  by-laws  are  by  them  made;  a  record  of  the  pro- 
ceedings in  this  meeting  is  then  filed  in  the  office  of  the  Secretary  of  State, 
whereupon  a  certificate  is  issued  by  him  to  the  effect  that  the  corporation  is 
fully  organized  according  to  the  laws  of  the  State. 

820.  Stock  Holders  or  Share  Holders. — Certificates  of  Stock  are  issued  to 
each  of  the  subscribers  for  the  number  of  shares  by  each  subscribed.  These 
certificates  are  transferable  at  the  pleasure  of  the  owners,  except  when  the 
owners  are  indebted  to  the  corporation,  then  the  transfer  cannot  be  made 
without  the  consent  of  the  corporation. 

821.  Capital  Stock  Increased  or  Diminished. — The  capital  stock  of  a  cor- 
poration may  be  increased  or  diminished  by  a  vote  of  a  majority  of  the  stock- 
holders representing  a  majority  of  the  stock,  a  statement  of  which  increase  or 
decrease  of  stock  must  be  filed  with  the  Secretary  of  State.  The  capital  stock 
of  a  corporation  is  never  allowed  to  exceed  a  certain  amount, — that  amount 
being  determined  by  the  laws  of  the  State  governing  "Corporations." 

822.  Book-keeping  for  a  Stock  Company. — A  "Cipital  Stock"  account  is 
opened  in  the  General  Ledger,  which  account  is  credited  whenever  capital  is 
paid  in,  /.  e.,  when  payments  are  made  on  subscriptions,  the  Capital  Stock 
account  is  credited  for  the  amounts  of  such  payments.  When  all  the  shares 
originally  issued  by  the  corporation  are  sold  and  paid  for,  then  the  Capital 
Stock  accGimt  will  be  credited  for  just  the  amount  that  the  certificate  origi- 
nally issued  and  filed  with  the  Secretary  of  State  indicated  would  be  the  cap- 
ital stock  of  the  corporation.  The  amount  for  which  a  Capital  Stock  account 
is  credited  is  called  the  "Paid  Up  Capital"  of  the  Company. 

After  the  shares  have  thus  all  been  issued  and  paid  for,  the  Capital  Stock 
account  is  allowed  to  stand  from  year  to  j-ear  without  an  entry  being  made 


DOUBLE   ENTRY   BOOK-KEEPING, 

thereon,  unless  the  capital  stock  of  the  corporation  be  diminished  or  increased, 
and  then  this  account  is  debited  or  credited  accordingly. 

823.  Gains  and  Losses  and  Surplus  Fund.— TX^q  gains  and  losses  of  the 
corporation  are  first  carried  to  a  Loss  &  Gain  account  the  same  as  in  any  other 
book-keeping;  but  afterward  when  the  net  gain  or  the  net  loss  is  found,  unlike 
in  any  other  book-keeping,  it  is  carried  to  a  "Surplus  Fund"  account,  and  in 
that  account  it  is  allowed  to  remain  until  a  dividend  is  declared  by  the  Com- 
pany, at  which  time  this  "Surplus  Fund"  account  is  debited  and  a  "Dividend" 
account  is  credited  for  the  amount  of  such  dividend.  Whenever  the  dividends 
are  paid  to  the  shareholders,  the  "Dividend"  account  is  debited  for  such 
amounts;  therefore,  when  they  have  all  been  paid,  the  "Dividend"  account 
will  just  balance. 

824.  There  is  another  method  of  disposing  of  the  net  gain,  which  is  to 
declare  a  dividend  as  soon  as  the  net  gain  is  found  for  a  certain  portion  of  that 
gain;  then  credit  "Dividend"  account  for  the  amount  of  the  dividend  thus 
declared,  and  "Surplus  Fund"  account  for  the  balance;  the  former  method, 
however  (823),  is  thought  to  be  the  better  one. 

825.  Dividends. — The  dividend  is  seldom  declared  for  the  full  amount  of 
the  gain,  for  the  reason  that  the  Company  wishes  to  reserve  a  portion  of  the 
amount  as  a  surplus  fund, 'against  which  they  may  draw  at  such  times  as  the 
net  gain  is  not  sufficient  to  make  up  the  customary  rate  per  cent,  of  dividend 
which  is  at  regular  intervals  declared  by  the  Company.  For  example:  If  a 
Company  declares  a  five  per  cent,  dividend  semi-annually,  and  the  number  of 
shares  issued  by  this  Company  require  at  this  per  cent,  a  dividend  to  the 
amount  of  $15,000  and  the  net  gain  of  the  Company  be  only  $12,000,  then  the 
"Surplus  Fund"  account  must  be  drawn  on  to  the  extent  of  $3,000. 

If  the  final  result  of  the  Company's  business  be  a  net  loss,  the  entire  amount 
of  such  loss  must  be  carried  from  the  Loss  &  Gain  account  to  the  debit  side 
of  the  "Surplus  Fund"  account.    ' 

Some  Stock  Companies  declare  dividends  semi-annually,  some  quarterly, 
and  a  few  monthly,  while  others  have  no  stated  times  in  which  to  declare  them, 
but  do  so  only  at  such  times  as  it  is  the  general  wish  of  the  stockholders  so 
to  do. 

826.  Dividend  Receipt  Book. — This  is  a  book  in  which  are  entered  in  alpha- 
betical order,  whenever  a  dividend  is  declared,  the  names  of  each  of  the  share- 
holders, together  with  the  number  and  value  of  shares  held,  the  percentage 
of  dividend  and  dividend  amount.  Opposite  each  of  these  amounts,  whenever 
the  dividends  are  paid  to  them,  the  shareholders  sign  their  names  and  enter 
the  dates  upon  which  they  receive  such  payment. 

827.  Stock  Ledger. — The  Stock  Ledger  is  a  book  in  which  is  kept  a  record 
of  the  names  of  all  the  shareholders  and  number  and  par  value  of  shares  held 
by  each.  It  is  a  private  book,  and  is  in  fio  zvay  connected  with  the  other  books 
of  the  company.  A  "Capital  Stock"  account  is  opened  in  this  book,  which  ac- 
count is  debited  for  the  total  number  and  par  value  of  the  shares  issued  by  t  he 
corporation;  following  this,  an  account  is  then  opened  with  each  of  the  share- 


823 

TO 

827 


828 

TO 

830 


DOUBLE   ENTRY   HOOK  KEEPING. 

holders;  then,  the  "Capital  Stock"  account  is  credited  for  all  shares  that  are 
disposed  of,  and  each  of  the  persons  to  whom  such  shares  were  sold  are  debited 
for  the  number  and  par  value  of  same.  When  the  total  number  of  shares 
issued  by  the  corporation  has  been  disposed  of,  the  "Capital  Stock"  account 
here  opened  will  balance,  and  all  the  shares  will  have  been  debited  to  share- 
holders; therefore,  when  this  account  does  not  balance,  the  difference  between 
the  two  sides  always  shows  the  "number  and  par  value  of  shares  remaining 
unsold,  or  not  yet  subscribed  for.  The  total  of  all  the  accounts  in  the  Stock 
Ledger  (including  the  difference,  if  any,  between  the  two  sides  of  the  "Capital 
Stock"  account)  should  always  represent  just  the  amount  of  stock  issued  by 
the  corporation. 

When  a  shareholder  transfers  shares  to  another  person,  the  person  to  whom 
the  shares  are  transferred  must  take  the  certificate  of  stock  to  the  Company 
which  issues  it  and  have  the  transfer  recorded  in  the  Stock  Ledger;  which  is 
done  by  the  Company  crediting  the  old  shareholder  and  debiting  the  new. 

828.  ''Limited  Liability"  and  ''Full  Liability"  Companies. —  LIMITED. — 
When  the  word  "Limited"  is  affixed  to  a  stock  company's  name,  it  signifies 
that  each  shareholder  is  individually  liable  to  the  creditors  of  the  company  for 
only  the  amount  representing  the  value  of  shares  held  by  each.  If  suit  is 
brought  against  the  company  for  a  claim  and  it  is  not  paid  by  the  companj',  ac- 
tion may  be  brought  against  any  one  of  the  shareholders  to  the  extent  of  the 
shares  held  by  him;  and  when  claim  is  by  him  paid,  he  may  recover  from  each  of 
the  other  shareholders  the  amount  paid  in  proportion  to  the  shares  by  each  held 
—  less  his  own  proportion  of  such  claim.  If  a"Limitcd  Liability  Company"omits 
to  add  the  word  "Limited"  after  its  name  wherever  and  whenever  they  cause 
it  to  appear,  a  heavy  fine  is  imposed  for  each  omission.  FULL. — When  the 
word  "Limited"  is  not  affixed  to  a  stock  company's  name,  it  is  understood 
that  it  is  a  "Full  Liability  Company."  In  such  a  company  the  shareholders  are 
each  individually  liable  to  the  creditors  of  same  for  the  total  liabilities  of  the 
company.  However,  suit  cannot  be  brought  against  an  individual  shareholder 
until  it  has  first  been  brought  against  the  company,  and  then,  if  not  paid,  the 
claimant  may  institute  proceedings  against  any  one  of  the  shareholders  of  the 
company  for  the  full  amount  of  the  claim ;  and  after  same  has  been  paid  by  the 
shareholder,  he  may  recover  from  each  of  the  shareholders  proportionately, 
according  to  the  number  of  shares  held  by  each,  the  amount  paid— less,  of 
course,  his  own  proportion  of  such  claim.  (For  further  points,  see  1136.) 


SUNDRY  INSTRUCTIONS,  HINTS,  ETC. 

829.  Checks,  Drafts,  Notes,  £;?<:.— When  a  check  is  printed  "Pay  to 

or  bearer",  a  person's  name  written  on  the  blank  line  between,  then  the  word 
"bearer"  erased  with  a  pen,  no  other  than  this  person  can  collect. 

830.  When  you  receive  a  bank  draft,  sight  draft,  or  check  made  payable 
to  the  order  of  the  party  sending  it,  see  whether  or  not  it  is  endorsed  by 


DOUBLE   ENTRY    BOOKKEEriNG. 

him.     If  not  endorsed,  return  it  to  him  for  endorsement,  as  it  is  of  no  value 
to  you  until  so  endorsed. 

831.  In  receiving  a  check  or  draft  from  a  person,  upon  which  check  or 
draft  the  person's  name  does  not  in  any  place  appear,  whether  made  payable 
to  order  or  to  bearer,  have  this  person  from  whom  you  receive  it  endorse  it; 
for  if  it  prove  to  be  worthless,  you  can  then  have  recourse  to  this  person,  as 
by  endorsing  his  name  on  the  back  of  it,  the  payment  is  by  him  guaranteed. 

832.  When  we  return  a  draft,  note  or  check  to  the  maker  of  same,  which 
draft,  note  or  check  we  had  endorsed,  we  should  always  erase  our  name  from 
the  paper  by  drawing  lines  through  it  with  the  pen. 

832  1-2.  In  handing  a  note  to  the  bank  or  express  company  for  collec- 
tion, which  note  will  be  due  in  a  few  days,  some  business  men  simply  make  a 
memorandum  in  full  for  same,  and  place  the  memorandum  with  the  not-yet- 
due  notes — making  no  entry  on  the  books  until  the  note  is  collected  and  the 
proceeds  of  same  returned, — then  the  Bills  Receivable  account  is  credited, 
and  the  memorandum  found  and  destroyed. 

833.  On  Receiving  Cash. — When  cash  is  received  examine  it  closely  to 
see  whether  or  not  there  are  any  counterfeits;  and  if  there  be  a  doubtful  bill, 
make  a  memorandum  of  it,  showing  from  whom  it  was  received,  then  try 
this  at  the  bank  in  the  next  deposit. 

834.  Payments  on  Discounted  Notes. — When  we  receive  payments  on 
notes  which  have  been  discounted  and  still  remain  in  the  bank,  we  simply 
take  the  money  to  the  bank  and  see  that  the  amount  is  by  the  banker 
endorsed  thereon — no  entry  being  made  for  same  on  our  books  unless  it  be 
to  make  a  memorandum  of  such  payments  in  the  Bills  Receivable  and  Bills 
Payable  Book. 

835.  IVaire  Protest. — When  there  are  no  endorsers  on  the  notes  we 
receive  from  our  customers,  and  we  wish  to  discount  them  in  the  bank,  waive 
protest  by  writing  on  the  backs  of  such  notes  "Protest  Waived,"  and  thereby 
save  the  customers  the  protest  fees  that  would  otherwise  be  charged  if  the 
notes  should  not  be  paid  when  due.  Care  must  be  taken  not  to  waive  protest 
on  notes  having  endorsers;  for  if  protest  be  waived  on  such  notes,  the  security 
is,  in  some  States,  released. 

836.  Sig/it  Draft.— Iw  making  a  sight  draft  on  a  person,  if  you  want  it 
paid  upon  presentation,  leave  the  "time"  blank;  i.  e.,  commence  it:  "Pay  to 
the  order  of,"  etc.  It  is  customary,  however,  to  make  the  drafts  "at  sight"  or 
"at  three  days'  sight"  in  order  not  to  take  the  person  upon  whom  drawn  by 
surprise,  but  to  give  him  a  little  time  to  raise  the  money. 

837.  Computing  Interest  on  Payments. — In  computing  interest  on  pay- 
ments on  notes,  it  is  the  better  plan  to  compute  the  interest  on  the  full  face 
of  the  note  up  to  the  present  time,  and  afterward  on  each  payment  up  to  the 
present  time;  then  the  difference  maybe  found  between  the  sums  total  of  the 
interest  on  the  payments  and  the  amount  of  the  interest  on  the  full  face, 
which  difference  will  be  the  net  amount  of  interest  due.     The  total  amount 


831 

TO 

837 


838 

AND 

839 


DOUBLE    ENTRY    BOOKKEEPING. 

due  will,  of  course,  be  the  difference  between  the  sum  total  of  the  payments 
and  the  sum  total  of  the  face  of  the  note  plus  the  interest  due. 

838.  "C.  0.  D."  Sales,  and  Sales  for  which  we  make  Sight  Draft  as  soon 
as  Goods  are  Shipped.— When  we  ship  goods  to  the  country  C.  O.  D.,  or  ship 
them  and  make  a  sight  draft  on  the  person  as  soon  as  the  goods  are  shipped, 
we  may  enter  the  person's  name  under  our  "Petty  Accounts,"  if  we  have  no 
regular  account  with  him,  as  it  is  not  advisable  to  open  an  account  for  only 
one  entry.  The  person  must,  of  course,  be  charged  as  soon  as  the  goods  are 
shipped,  and  credited  when  the  money  is,  by  the  express  company  or  bank, 
collected  and  returned  to  us. 

839.  Different  Kinds  of  Business  Consolidated.— When  a  merchant  con- 
ducts several  different  kinds  of  business  in  one,  and  wishes  to  know  his  gains 
on  sales  for  each,  the  books  may  be  kept  in  the  following  manner:  The  cash 
sales  for  each  business  must  be  kept  separate,  and  at  the  close  of  each  day, 
week  or  month  credited  to  the  respective  accounts  to  which  they  belong; 
extra  columns  may  be  kept  for  each  business  in  the  Journal,  and  whenever 
sales  are  made  on  account,  the  amounts  of  such  sales  extended  into  the 
respective  columns  to  which  they  belong,  the  totals  of  these  columns  carried 
forward  until  the  end  of  the  month,  and  then  the  totals  for  the  month  cred- 
ited to  the  respective  accounts  in  the  Ledger.  For  example:  If  Grocery, 
Dry  Goods,  and  Boots  and  Shoes  consolidated,  on  the  credit  side  of  the  Jour- 
nal would  be  kept  four  columns;  a  "Miscellaneous  Cr.,"  a  "Grocery  Cr.,"  a 
"Dry  Goods  Cr.,"  and  a  "Boots  and  Shoes  Cr.";  then  when  a  sale  is  recorded, 
that  part  of  it  which  belongs  to  the  grocery  department  is  extended  into  that 
column,  the  dry  goods  into  the  "Dry  Goods"  column,  etc.;  and  whenever  a 
credit  that  belongs  to  none  of  the  three  latter  columns,  it  is  extended 
into  the  "Miscellaneous  Cr."  column.  The  Invoices  are  first  assorted  accord- 
ing to  the  different  kinds  of  business,  after  which  the  Grocery  bills  are 
entered,  then  the  Dry  Goods,  and  then  the  Boots  and  Shoes.  The  columns 
for  each  of  these  different  kinds  of  business  are  treated  the  same  throughout 
as  is  the  "Merchandise  Cr."  column  in  the  Journal  of  "The  Illustration;"  the 
invoices  are  entered  the  same  as  the  Mdse.  invoices,  and  the  accounts  are 
treated  the  same  as  the  Merchandise  account  is  treated  in  "The  Illustration." 

The  books  are  kept  in  this  manner  simply  as  a  matter  of  satisfaction,  that 
we  may  know  how  much  has  been  made  on  the  goods  sold  from  each  business. 
There  are  but  very  few  who  keep  the  expenses  for  each  business  separate; 
but  when  they  do,  either  a  "full  set"  of  expense  accounts  must  be  kept  for 
each  business,  or  the  expenses  incurred  in  each  business  must  at  once  be 
charged  directly  to  the  respective  business  to  which  it  belongs.  For  exarn- 
ple:  When  a  grocery  clerk  is  paid  his  wages,  the  amount  must  at  once  be 
debited  to  the  Grocery  account. 

The  expenses  may  be  charged  proportionately  to  the  different  kinds  of 
business;  /.  e.,  when  the  sum  total  of  the  expenses  for  the  entire  business  is 
found,  a  certain  per  cent,  of  same  may  be  carried  to  the  debit  of  the  Grocery 

114 


840 

DOUISLK.   ENTRY   BOOK-KEEPING.  TO 

844 

account,  a  certain  per  cent,  to  the  Dry  Goods,  and  a  certain  per  cent,  to  the 
Boots  and  Shoes. 

8-tO,  On  Trans ferritig  Accounts  from  an  Old  Ledger  to  a  New.—1V\%  is 
done  by  balancing  the  accounts  in  the  old  Ledger  in  the  manner  described  in 
paragraph  308,  following  the  directions  there  given  in  entirety,  excepting,  while 
reading  those  instructions,  substitute  "to  the  page  opened  for  this  account  in 
the  new  Ledger"  in  place  of  "new  page." 

841.  Statements.— It  is  advisable  to  make  and  send  out  statements  of  al) 
our  customers'  accounts  on  the  first  of  every  month.  By  so  doing  an  account 
cannot  escape  our  notice  and  thereby  be  allowed  to  remain  on  our  books  until 
it  is  long  past  due  without  the  person  having  been  notified  monthly  of  that 
fact.  Another  reason  for  so  doing  is,  because  if  any  mistakes  have  been  made 
in  posting,  by  which  an  item  was  posted  to  the  wrong  account,  or  to  the  wrong 
side  of  an  account,  we  are  then  notified  by  the  persons  who  receive  the  incor- 
rect statements,  and  we  may  then  make  the  corrections  in  the  Ledger. 

842.  On  Copying  hivoices  of  Goods  We  Buy. — There  are  a  few  firms  who 
keep  Invoice  Books  or  Purchase  Books  into  which  they  copy  the  items  from 
all  the  bills  of  goods  they  buy.  This  is  an  absurd  practice  and  a  lavish  waste 
of  time;  for,  after  the  amount  of  an  invoice  has  been  credited  to  the  person, 
the  invoice  is  thereafter  held  as  a  memorandum  for  reference;  and,  if  we  wish 
to  refer  to  a  purchase  we  have  but  to  find  the  invoice,  which  is  done  in  the 
manner  described  in  309. 

843.  Classification  of  Accounts. — When  but  one  Ledger  is  used,  it  is  advis- 
able to  have  the  miscellaneous  accounts  in  the  fore  part,  and  following  these, 
the  accounts  with  persons  from  whom  we  buy,  reserving  the  back  part  of  the 
Ledger  for  the  accounts  with  our  customers;  or,  we  may  have  our  dealer's 
accounts  in  the  fore  part  and  our  creditors  in  the  back,  as  we  prefer. 

844.  Overcharges,  etc. —  Sometimes  persons  from  whom  we  buy  goods 
guarantee  the  freight  at  a  certain  rate,  i.  e.,  guarantee  that  the  goods  will  be 
laid  in  our  store  at  a  certain  rate  per  100  lbs.  or  per  piece.  If  the  Railroad 
company  charges  us  more  than  this  rate,  we  debit  the  overcharge  to  the  per- 
son from  whom  we  bought  the  goods.  If  any  overcharge  in  prices  on  goods, 
such  overcharge  may  be  deducted  from  the  bills  before  they  are  entered.  If 
goods  are  damaged,  we  must  first  ascertain  whether  they  were  damaged  while 
in  transit,  or  before  they  were  shipped, — if  the  former,  the  Railroad  company 
mus^  be  debited  for  the  amount  of  such  damages;  if  the  latter,  the  amount  of 
such  damages  may  either  be  deducted  from  the  bill  before  it  is  entered,  or  the 
full  face  of  the  bill  credited  to  the  person  and  the  amount  of  the  claim  for 
damages  afterward  debited  to  his  account. 

If  any  error  in  "figuring,"  the  amount  of  such  error  may  be  deducted  from 
the  bill  before  it  is  entered. 

If  a  claim  for  overcharge,  damaged  goods,  or  error,  is  made  on  a  bill  after  it 
has  been  entered,  the  amount  of  such  claim  cannot  then,  of  course,  be  deducted 
from  the  bill,  but  must  be  debited  to  the  person's  account.     Whenever  such  a 


845 

TO 

847 


UUUBLE  £NTRY  BOOKKEEPING. 

charge  is  made,  the  person  must,  in  all  cases,  be  notified  of  same  either  by  send- 
ing a  bill  or  writing  a  letter  to  that  effect. 

845.  "Easy'  Customers. — There  are  very  few  firms  who  have  not  some 
customers  who  "take  the  world  easy"  and  allow  nothing  to  trouble  them — not 
even  their  debts;  and  in  consequence  of  this  independence  (?)  such  customers 
would  willingly  allow  their  accounts  to  pass  into  the  "vale  of  forgetfulncss," 
were  it  not  for  the  fact  that  somehow  or  another  the  owners  of  such  accounts 
cannot  tune  their  ideas  to  harmonize  with  them,  and.  therefore,  there  is  a 
discord.  We  might  dun  such  customers  for  cash,  or  for  notes  to  balance  their 
accounts  until  "doomsday,"  and  be  just  as  successful  at  the  beginning  of  our 
exertions  as  at  the  end.  However,  if  we  succeed  in  getting  notes  from  such 
persons,  there  are  then  some  hopes  of  ultimately  collecting  the  amounts  duej 
for  they  then  realize  that  they  must  make  some  exertion  to  pay,  unless  they 
have  become  so  hardened  that  not  even  a  note  will  move  them  to  action.  The 
tougher  the  customer  we  have,  the  sharper  the  "goad"  we  seek— if  only  mod- 
erately dilatory  and  we  think  him  abundantly  able  to  pay  all  his  debts,  we 
simply  ask  for  a  note  without  security;  if  a  little  doubtful,  we  ask  him  for  a 
note  with  a  good  endorser;  if  altogether  doubtful,  we  endeavor  to  get  notes 
secured  by  a  mortgage  on  his  stock  of  goods,  his  lot,  or  his  farm.  There  are 
many  customers  who,  when  we  send  a  statement  requesting  them  to  send  us 
notes  for  amount  due,  will  take  no  notice  whatever  of  our  request;  but  if,  when 
we  send  the  statement,  we  will  fill  out  and  enclose  with  same  notes  for  them 
to  sign,  they  then  feel  in  duty  bound  either  to  do  as  we  request,  or  offer  some 
very  good  excuse  for  not  so  doing;  therefore  this  latter  method  is  recom- 
mended. 

846.  The  Services  of  an  Office  Boy.—K  smart  office  boy  ma\-,  in  most 
cases,  be  a  very  great  convenience  to  a  book-keeper;  so  much  so,  that  the 
services  of  an  assistant  book-keeper  may  be  dispensed  with.  For  instance, 
he  may  do  all  such  work  as  making  duplicate  bills,  copying  letters,  addressing 
envelopes  and  enclosing  the  letters,  statements  or  bills  in  same,  delivering  the 
statements  to  the  city  customers  on  the  first  of  every  month,  running  errands, 
etc.,  etc.;  forms  of  business  letters  may  be  prepared  by  the  book-keeper,  and 
by  using  these,  the  boy  may  write  a  great  many  business  letters  that  would 
otherwise  have  to  be  written  by  the  book-keeper.  One  day  in  such  a  school 
is  better  for  the  boy  than  a  whole  month  in  a  business  college. 

847.  Errors  in  Posting.— When  errors  are  made  in  posting,  some  book- 
keepers make  what  is  called  a  "contra  entry;"  /.  e.,  make  an  entry  on  the 
jpposite  side  of  the  account  "By  Krror"  to  balance  the  entry  erroneously 
made, and  afterward  post  the  amount  as  it  should  first  have  been  posted;  and 
some  book-keepers  erase  with  a  steel  eraser  the  error,  but  some  business  men 
object  to  "scratching  on  the  books,"  not  wanting  a  figure  altered  after  it  has 
once  been  placed  in  the  Ledger.  A  better  method  than  cither  of  the  fore- 
going, and  one  to  which  no  person  could  object,  is  to  simply  draw  a  red  line 
through  the  amount  of  such  errcr  and  then  post  the  amount  as  it  should  have 
been  posted.     If,  however,  the  error  was  made  in  a  previous  month,  it  is  then 


848 

DOUBLE  ENTRY  BOOK  KEEPING.  and 

849 

necessary  either  to  make  a  contra  entry,  as  above  described,  or  if  a   line 
drawn  through  the  amount  to  change  the  lead-pencil  Ledger  footings. 

848.  On  Making  Mistakes.— T\\QrQ  are  some  business  men  who,  in  a  tem- 
porary fit  of  insanity,  forget  that  they  are  the  only  persons  who  can  justly 
claim  "infallibility,"  and,  in  consequence  of  this  little  forgetfulncss,  chastise 
the  book-keeper  severely  for  every  little  "blunder"  he  makes.  A  book- 
keeper's work  is,  to  say  the  least,  very  monotonous,  and  it  is  with  great  diffi- 
culty that  he  confines  his  mind  to  his  work  from  morning  until  night,  day 
after  day.  The  errors  he  makes  are  usually  made  at  such  times  as  his  mind 
is  roaming  in  other  fields  rather  than  that  in  which  he  is  at  work-perhaps 
while  he  is  looking  forward  to  the  day  when  he  can  give  "figures"  and  "trial- 
balances"  a  long  vacation.  While  posting,  it  is  advisable  for  the  book-keeper 
to  "make  assurance  doubly  sure"  by  comparing  the  amount  carried  to  the 
Ledger  with  the  amount  on  the  book  from  which  it  is  posted,  at  least  twice, 
noticing  at  the  same  time  whether  posted  to  the  proper  side  of  the  account. 

When  cash  is  received  or  paid  out,  it  is  better  not  to  trust  the  memory 
one  instant,  for  it  is  sometimes  very  treacherous,  but  to  make  the  entry  on 
the  Cash  Book  at  once;  otherwise  an  hour  might  be  spent  in  seeking  for  a 
little  "difficulty"  in  the  cash  that  might  have  been  avoided  if  the  entry  had 
been  made  at  the  proper  moment. 

Units  Under  Units,  Etc—lhc  utmost  care  must  be  taken  at  all  times  to 
place  units  directly  under  units,  tens  directly  under  tens,  etc.,  etc.;  for  while 
adding,  if  such  care  has  not  been  taken,  it  is  very  easy  to  make  a  mistake. 
Better  to  spend  an  hour  now  in  being  over-particular  on  this  score,  than  a 
week  at  the  end  of  the  month  when  the  trial-balance  is  taken,  in  finding  an 
error  caused  by  carelessness  in  placing  tens  under  hundreds,  or  something 
similar. 

849.  Invoices,  Notes,  etc.,  tve  have  to  Pay.— Vox  the  invoices,  notes,  and 
acceptances  for  which  we  have  to  remit,  and  the  sight  drafts  for  which  we 
have  to  pay,  would  recommend  the  following  method  of  making  the  daily 
lists  or  memoranda:  Take  a  small  book  and  arrange  the  dates  in  the  form  of 
a  diary,  omitting  the  Sundays;  then,  on  the  first  of  each  month,  from  the 
Bills  Payable  Book,  enter  under  the  respective  dates  when  they  become  due, 
on  this  small  book,  all  the  notes  and  acceptances  we  have  to  pay  during  the 
month.  After  which,  the  sight  drafts  we  accept  and  the  bills  for  which  we 
wish  to  remit  may,  from  day  to  day,  be  herein  entered  under  the  respective 
dates  when  due.  Enter  first  th€  amount;  then  the  firm  name,  adding  the 
address  (if  not  familiar  with  same);  then,  if  a  note,  acceptance,  or  sight  draft, 
write  "Note,"  "Ace,"  or  "St.  D'ft,"  adding  the  date  and  time  of  same;  and 
if  a  bill,  or  several  bills,  add  date  or  dates  of  same.  By  making  the  lists  in 
this  manner,  all  the  remittance  letters  may  be  written  from  the  memoranda 
here  made.  The  amount  to  be  paid  daily  may  be  found  by  finding  the  sums 
total  of  these  lists.  If  we  wish  to  buy  E.xchange  (bank  drafts)  to  pay  for 
such  notes,  invoices,  etc.,  as  we  have  in  one  of  these  daily  lists,  or  if  we  wish 
to  pay  for  such  of  our  notes,  acceptances,  and  sight  drafts  as  are  made  pay- 

11/ 


850 


DOL'ULE    ENTRY    liOOK-KEEnXG. 

able  at  our  bank,  we  simply  find  the  sum  total  of  the  list  thus  made  and  give 
the  bank  a  check  for  the  same,  filling  out  a  "Drafts  Wanted"  blank  for  the 
Exchange  we  want,  and,  together  with  the  "notices"  we  have  received  from  the 
bank  for  notes  and  acceptances  due  on  that  day,  pin  them  to  the  check; 
after  which  we  receive  from  the  bank,  in  return  for  same,  the  notes  and 
acceptances  stamped  "Paid,"  and  the  Bank  Drafts,  which  should  aggregate  an 
amount  equal  to  the  full  amount  of  the  check  we  gave.  The  following  will 
be  given  as  an  illustration  of  this  method — the  "17"  at  the  top  being  the  day 
of  the  month: 

—17- 

200  00— M.  D.  Hesse,  Cincinnati — Note— 11-16— 60  ds. 
300.00— L.  O.  Brainard — Ace— 12-15— 30. 
100.00— J.  B.  Lippencott  &  Co.— St.  Dft. 
122.00— D.  Appleton  &  Co.— 11-16— 12-2. 

$722 . 00 

850.  Sundry  Minute  Savings  of  Time  and  Labor. — A  great  saving  of 
time  may  be  realized  in  the  wholesale  business,  while  making  bills  and  state- 
ments, by  giving  the  larger  cities  in  which  we  have  many  customers,  a  city 
number;  then  the  bill  clerk,  while  making  the  bills,  or  the  book-keeper,  while 
making  the  statements,  for  the  convenience  of  the  person  who  addresses  the 
envelopes  for  same,  simply  indicates  the  addresses  of  the  customers  by  adding 
the  respective  city  numbers  representing  the  cities  in  which  they  belong — the 
person  addressing  the  envelopes  being  also,  of  course,  familiar  with  the  city 
numbers. 

While  addressing  several  envelopes,  lay  the  letters,  bills  or  statements  to 
the  right  and  the  envelopes  to  the  left ;  then,  after  they  have  all  been 
addressed,  they  will  be  found  in  regular  order,  and  consequently  such  letters, 
etc.,  may  be  expeditiously  folded  and  enclosed. 

While  posting,  it  is  advisable  to  use  a  small  slip  of  colored  paper  on  the 
money  column  of  the  Journal  or  Cash  Book,  and  always  to  keep  this  directly 
over  the  amount  that  js  next  to  be  posted,  moving  the  slip  downward  to  the 
next  amount  as  soon  as  that  amount  is  posted.  By  so  doing,  much  time  may 
be  saved  that  would  otherwise  be  spent  in  tracing  the  lines  out  for  the 
amounts;  and  it  is  a  good  way  to  guard  against  errors  in  posting  the  wrong 
amounts  to  the  Ledger. 

It  is  now  rapidly  growing  into  custom  among  business  men  to  omit  all 
"handles  to  names,"  such  as  "Mr.,"  "Esq.,"  "Messrs.,"  etc.,  while  addressing 
envelopes,  writing  letters,  notes,  checks,  drafts,  etc.,  it  being  thought  to  be 
understood,  therefore  superfluous. 

While  receipting  bills,  statements,  etc.,  the  simple  word  "Paid"  answers 
the  same  purpose  as  "Received  Payment,"  and  is  much  more  quickly  written. 

It  is  of  course  understood  by  everyone,  that  the  nearer  perpendicular  the 
writing,  the  more  there  may  be  written  on  a  line.  It  is  better  to  have  an  ex- 
planation of  an  entry  in  the  Cash  Book  never  take  u])  more  space  than  the  line 

ilS 


851 

DOUBLE   ENTRY   liOOK-KEEl'ING. 

upon  which  the  entry  is  made;  and  as  some  entries  require  a  considerable 
amount  of  explanation,  it  is  necessary  that  the  same  be  made  very  compact 
as  well  as  very  concise. 

851.  Sundry  Explanations  and  Remarks.— Ihc  meaning  of  the  word  "Sun- 
dries" is  "several" — For  example:  when  is  written  "Mdse.  Ur.  To  Sundries," 
the  meaning  is,  that  Merchandise  account  is  debited  for  the  sum  total  of  an 
amount  for  which  two  or  more  or  several  accounts  are  credited. 

A  debtor  is  a  person  who  is  indebted  to  or  owing  us;  and  a  creditor,  is  a 
person  to  whom  we  are  indebted  or  owing;  therefore,  the  former,  one  who  is 
debited  on  our  books,  and  the  latter,  one  who  is  credited  on  our  books. 

When  goods  are  sold  or  bought  "on  account,"  the  meaning  is  that  they  are 
not  paid  for,  but  are  to  be  debited  or  credited  to  the  party  to  whom  sold  or 
from  whom  bought;  therefore,  when  the  expression  "on  account"  is  used,  it 
indicates  that  the  amount  is  to  be  placed  to  the  debit  or  credit  of  some  per- 
sonal account. 

Those  accounts  upon  which  wc  think  there  will   never   more  be   entries  • 
made,  are  called  "Dead  Accounts,"  and  those  accounts  which  arc  yet  open, 
and  upon  which  we  either  frequently  or  seldom  make  entries,  are  called  "Live 
Accounts."     The  more  frequently  the  entries  are  made,  the  more  is  the  vitality 
with  which  the  account  is  infused. 

When  there  are  but  one  or  two  "extra  columns"  in  the  Cash  Book  or  the 
Journal,  it  is  not  necessary  to  have  printed  or  to  write  the  names  of  same  at 
the  top  of  each  column;  for  the  uses  of  same  are  known  to  the  book-keeper 
and  he  is  not  obliged  to  refer  to  the  top  of  the  page  for  the  name  of  the  col- 
umn in  which  to  enter  an  item.  However,  when  several  "extra  columns"  are 
used,  it  is  necessary  to  have  the  book  ruled  and  printed  to  order. 

No  employe  can  sign  notes,  drafts  or  checks  for  the  firm  without  first  hav- 
ing procured  a  "Power  of  Attorney"  authorizing  him  so  to  do;  but  he  may 
endorse  for  deposit  in  the  bank  drafts,  notes,  checks,  etc.,  made  payable  to  the 
order  of  the  firm,  by  simply  getting  a  written  order  from  them  to  the  cashier 
of  the  bank  authorizing  him  to  do  so.  When  the  latter  is  done,  the  signature 
of  the  employe  so  authorized  is  recorded  in  the  bank's  "Signature  Book,"  and 
the  firm's  written  order  is  taken  by  the  cashier  of  the  bank  and  filed  away,  so 
as  to  insure  against  any  accidents,  etc.,  that  might  occur  through  the  careless- 
ness or  negligence  of  such  employe. 

When  a  merchant's  Liabilities  exceed  his  Resources,  he  is  then  insolvent; 
and  the  difference  between  the  sum  total  of  his  Resources  and  the  sum  total 
of  his  Liabilities  is  his  net  insolvency,  which  difference  will  appear  on  the  debit 
side  of  his  Stock  account  instead  of  on  the  credit,  as  is  the  case  when  the  Re- 
sources exceed  the  Liabilities  and  the  difference  is  known  as  a  net  worth. 


119 


SINGLE   ENTRY   BOOK-KEEPING. 


SINGLE  ENTRY  BOOK-KEEPING. 


852.  The  difference  between  Single  Pantry  book-keeping  and  Double 
Entry  book-keeping  is  explained  in  paragraphs  3  and  6.  Any  person  who  is 
the  possessor  of  as  much  as  a  thimble  full  of  brains,  may  already,  without  in- 
struction, justly  and  honestly  claim  a  knowledge  of  Single  Entry  book-keep- 
ing; for  the  boy  but  five  years  of  age  (unless  he  be  a  son  of  a  business  college 
professor)  knows  full  well  that  if  he  buys  something  and  does  not  pay  for  it  that 
he  owes  the  person  from  whom  the  article  was  bought,  and  thereupon  he  con- 
ceives the  idea  of  credit;  and  when  he  pays  for  this  article,  he  knows  full  well 
that  the  debt  exists  no  longer,  and  thereupon  he  conceives  the  idea  of  a  debit 
to  balance  that  credit; — when  he  sells  an  article  and  does  not  receive  payment 
therefor,  he  knows  that  the  person  to  whom  he  sold  the  article  is  indebted  to 
him  for  same,  and  thereupon  the  idea  of  debit  is  conceived;  and  when  this 
person  cancels  the  obligation  by  paying  for  the  marbles  or  taffy,  the  boy  knows 
full  well  that  his  comrade  to  whom  he  sold  the  same  owes  him  no  longer,  and 
thereupon,  an  idea  is  conceived  for  a  credit  to  balance  that  debit — this  is  all 
that  Single  Entry  book-keeping  consists  of— simply  debiting  persons  when 
we  sell  them  goods  on  account  in  the  manner  and  form  illustrated  in  paragraph 
370  and  crediting  them  when  they  pay  for  same; — and  crediting  persons  when 
we  buy  goods  from  them  on  account  in  the  manner  illustrated  in  paragraphs 
401  to  407,  and  debiting  them  when  we  pay  for  same. 

It  will  be  seen  that  in  strictly  Single  Entry  book-keeping  there  are  no  ac- 
counts in  the  Ledger  but  accounts  with  persons ;  therefore.  Single  Entry,  unlike 
Double  Entry,  does  not  exhibit  a  statement  of  the  business  done,  but  is  simply  a 
record  of  the  amounts  owing  to  us  and  by  us  on  account.  (See  3.)  In  posting 
an  item  in  Single  Entry,  if  the  person  is  debited,  we  simply  post  the  amount 
to  the  debit  of  his  account  in  the  Ledger,  and  make  no  credit  whatever;  if 
the  person  is  credited,  we  simply  post  the  amount  to  the  credit  of  his  account 
in  the  Ledger,  and  make  no  debit  whatsoever  for  same.  Whenever  there  are 
any  other  than  personal  accounts  in  the  Single  Entry  Ledger,  there  has  been 
just  so  much  borrowed  from  Double  Entry  book-keeping.  (See  313  and  314.) 
There  are  a  great  many  firms  who  keep  a  Merchandise  account  and  an  Ex- 
pense account  in  the  Ledger  simply  as  memorandum  accounts,— to  the  Mer- 
chandise account  they  post  at  the  end  of  each  month,  the  same  as  in  Double 
Entry,  the  total  sales  for  the  month;  and  to  the  Expense  account  they  post 
all  items  of  expense,  of  whatsoever  kind.  These  accounts  are  kept  just  as  a 
matter  of  gratification  that  they  may  see  what  their  total  sales  for  the  year 
are  and  what  their  total  expenses.  They  also  keep  a  Cash  Book  which  they 
treat  in  the  same  manner  as  the  book  illustrated  in  this  work.  There  are 
some  houses  who  keep  a  Bank  account— crediting  the  bank  on  the  debit  side 
of  the  Cash  Book  when  checks  are  drawn,  and  debiting  the  accounts  for  which 
such  checks  are  given  on  the  credit  side  of  the  Cash  Book;— and  debiting  the 
bank  on  the  credit  side  of  the  Cash  Book  whenever  deposits  are  made;  but 
the  system  recommended  in  86,\  is  the  one  most  in  use 


853 

DOUBLE   ENTRY   HOOK  KEEI'ING. 

ADDITIONAL  BOOKS  USED  IN  A  WHOLESALE  BUSINESS. 

853.  The  books  used  in  a  wholesale  business  in  addition  to  those  already 
explained  and  illustrated  heretofore  in  this  work  arc  as  follows: 

Back  Orders.— A  book  in  which  arc  entered  orders  for  goods  wc  have  not 
in  stock,  but  have  ordered  or  intend  to  order.  Such  orders  are  allowed  to 
remain  in  this  book  until  the  goods  arrive,  then  they  are  filled  and  the  charges 
transferred  from  this  book  to  the  Journal,  the  same  as  from  the  Sales  Books 
to  the  Journal. 

Debit  Ledger  or  Dealers  Ledger.— K  book  in  which  are  kept  exclusively 
accounts  with  our  customers. 

Credit  Ledger  or  General  Ledger.— Ahook  in  which  are  kept  accounts  with 
persons  from  whom  we  buy  goods;  also  all  other  accounts  that  do  not  belong 
in  the  Debit  or  Dealer's  Ledger. 

Eastern  Order  Book.— A  book  in  which  is  made  a  record  of  the  goods  we 
order,  whether  through  agent  or  by  mail,  with  prices  and  terms  affixed  which 
were  guaranteed  by  agent  or  quoted  by  rnail.  Nearly  all  large  wholesale 
houses  have  a  Stock-Keeper,  whose  duty  it  is  to  keep  posted  on  the  stock  of 
goods  in  the  store,  and  to  report  whenever  the  stock  is  running  down  in  any 
particular  line;  then  a  memorandum  is  made  in  this  book  and  the  goods  are 
ordered. 

Receiving  Book. — This  is  a  book  in  which  is  made  a  record  of  goods  we 
receive  from  the  parties  from  whom  we  bought.  The  record  is  made  just  as 
soon  as  the  goods  are  placed  in  the  store.  The  invoices  are  checked  off  from 
this  book  to  indicate  that  the  goods  have  been  received. 

Change  Book.— It  is  customary  with  most  manufactories  and  large  whole- 
sale houses  to  notify  their  customers  of  any  changes  in  prices  of  the  goods 
they  handle;  and  when  we  receive  such  advice  we  make  a  memorandum  of  the 
present  price  in  this  book.  Our  traveling  agents  are  then  all  advised  of  such 
changes,— if  not  of  much  consequence,  by  letter,  and  of  great  importance,  by 
telegram.  We  use  our  cost  mark  in  this  book  instead  of  the  figures  to  prevent 
the  "curious"  from  becoming  enlightened  should  they  at  any  time  find  this 
book  lying  open  on  the  desk. 

Price  Books.— 'Y\\&sft  are  small  books  carried  by  each  of  the  salesmen  and 
proprietors  of  the  firm,  in  which  is  arranged  in  alphabetical  form  a  list  of  all 
the  goods  in  the  store  with  both  the  cost  and  the  selling  prices  attached. 
Whenever  a  memorandum  is  made  in  the  Change  Book  for  a  change  in  the 
price  of  any  particular  line  of  goods,  the  change  is  at  once  made  on  each  of  the 
Price  Books  to  correspond  with  same. 

Sales  Books.— In  some  of  the  largest  wholesale  houses  a  very  nice  system 
of  keeping  Sales  Books  is  adopted,  which  will  be  described  as  follows: 
They  have  labeled  on  one,  "Monday,  Wednesday,  Friday;"  on  the  other, 
"Tuesday,  Thursday,  Saturday."  The  sales  for  each  of  the  different  days 
of  the  week,  are  recorded  in  the  respective  book  upon  which  is  labeled  the  day. 
While  entries  are  being  made  on  Tuesday  in  the  "Tuesday"  book,  the  entries 


S51 


DOUBLE   ENTRY   BOOK-KEEPING. 

that  were  made  on  the  previous  day  are  being  posted  from  the  "Monday" 
book;  therefore  the  "Monday"  book  is  handed  in  to  the  book-keeper  by  the 
entry  clerk  on  every  Monday  night,  and  the  "Tuesday"  book  is  by  the  book- 
keeper handed  to  the  entry  clerk  on  every  Tuesday  morning  and  so  on  through 
the  week.  By  so  doing  the  book-keeper  is  never  interrupted  while  posting 
these  books. 

Sales — Anotlier  Method. — There  is  another  method  which  will  be  described 
as  follows:  To  have  loose  sheets  ruled  in  regular  Sales  Book  form,  and  num- 
bered from  "i"  forward.  The  sales  are  recorded  on  these  sheets  the  same  as 
they  would  be  if  recorded  in  a  book;  when  a  sheet  is  filled  it  is  passed  to  the 
book-keeper  who  posts  all  the  entries  on  it,  and  afterward  files  it  in  a  safe  place 
until  he  has  a  certain  number  of  pages  or  of  months,  when  he  has  them  bound 
in  book  form.  The  total  is  posted  to  the  credit  of  Mdse.  account  monthly 
from  this  book. 

Sales — Another  Method. — There  is  another  method  which  is  much  in  use 
because  of  its  simplicity  and  labor-saving,  which  will  be  described  as  follows: 
Write  the  invoices  of  goods  we  sell  in  copymg  ink  and  copy  them  in  a  copy- 
ing book  used  expressly  for  that  purpose;  post  the  charges  to  the  personal 
direct  from  this  copying  book  to  the  Ledger,  carry  forward  the  sales  from 
page  to  page  until  the  end  of  the  month,  and  then  post  the  total  for  the 
month  to  the  credit  of  Merchandise.  Some  firms  adopt  a  method  oi  mniiber- 
ing  the  bills,  and  when  posting  to  refer  m  the  Ledger  to  the  bill  number, 
instead  of  to  the  page  upon  which  the  bill  is  copied. 

The  Different  Books  Used. — The  books  used  in  a  business  depend  entirely 
upon  the  nature  and  style  of  the  business,  although  a  person  will  often  find 
books  exactly  alike  in  nature  and  uses,  but  as  unlike  in  names  as  "Business 
College"  is  (in  name)  unlike  "Fools'  Resort." 


DIRECTIONS  FOR  CLOSING  A  SET  OF  BOOKS  FOR  A  BUSINESS 

WHICH  HAS  BEEN  RUNNING  FOR  SEVERAL  YEARS— THE 

BOOKS  HAVING  BEEN  KEPT  BY  SINGLE  ENTRY. 

854.  1st. — Take  an  inventory  of  all  the  merchandise,  store  fixtures,  etc., 
etc.,  belonging  to  the  firm. 

2d. — Make  a  statement  of  all  the  Resources  and  Liabilities  of  the  firm. 
(See  20  and  21.)  Make  this  statement  in  the  form  of  the  Trial  Balance  illus- 
trated in  paragraphs  810  and  812, — entering  the  Resources  in  the  debit  column 
and  the  Liabilities  in  the  credit.  Include  the  private  accounts  of  each  of  the 
partners  in  this  statement,  the  same  as  any  personal  accounts. 

3d. — Find  the  difference  between  the  sum  total  of  the  Liabilities  and  the 
sum  total  of  the  Resources,  and  this  difference  will  be  t\\&  present  gross  worth 
of  the  firm. 


DOUBLE   ENTRY   BOOKKEEPING.  AND 

856 

4.th. — Find  the  net  worth  of  the  firm  at  commencement  of  business  (the 
sum  total  of  all  the  partners'  original  investments),  then,  find  the  difference 
between  the  now  present  gross  worth  and  the  then  present  7u-t  worth  of  same, 
—which  difference  will  be  the  net  business  gain  or  net  business  loss  for  the 
firm— if  worth  more  now  than  then,  of  course  a  gain;  and  if  worth  less  now 
than  then,  a  loss. 

5th. — If  a  net  business  gain,  credit  each  partner's  Stock  account  for  his 
share  of  such  gain;  if  a  net  business  loss,  debit  each  partner's  Stock  account 
for  his  share  of  such  loss. 

6th. — Close  each  partner's  Private  account  and  carry  the  balance  of  same 
to  their  respective  Stock  accounts.  If  the  debit  side  of  a  Private  account  be 
the  larger,  the  difference  between  the  two  sides  is  carried  to  the  debit  side  of 
the  Stock  account;  if  the  credit  side  be  the  larger,  the  difference  between  the 
two  sides  is  carried  to  the  credit  side  of  the  Stock  account. 

7th. — The  difference  between  the  two  sides  of  the  respective  Stock  ac- 
counts is  now  found,  which  difference  is  the  present  net  worth  of  each — and 
this  is  the  object  in  view  in  closing  the  books— to  find  ihc prese?tt  net  worth  oj 
each  of  the  partners.     This  concludes  the  closing  of  the  books. 

855.  Remarks.— T\\GX&  are  some  firms  that  keep  their  books  by  Single 
Entry  and  allow  the  same  to  run  several  years  without  closing  them, — either 
not  wanting  to  take  the  trouble  to  find  out  how  much  lost  or  gained  by  closing 
the  books,  or  worse  still,  not  knowing  the  proceedings  for  doing  so,  and  they 
thus  allow  them  to  run  from  year  to  year,  until  finally,  there  is  "a  death  in 
the  family,"  or  one  of  the  members  of  the  firm  wishes  to  withdraw,  and  then 
it  becomes  necessary  to  close  the  books  to  find  the  present  net  worth  of  each; 
which  closing  is  done  according  to  instructions  given  in  this  article. 

In  making  a  statement  of  the  Resources  and  Liabilities,  the  Private  ac- 
counts of  all  the  members  must  be  included,  in  order  to  ascertain  the  net 
business  gain  or  net  business  loss  of  the  firm;  and,  afterwards,  these  Private 
accounts  must  finally  be  closed  and  carried  into  the  respective  Stock  accounts 
of  each  of  the  members  in  order  to  find  the  present  net  worth  of  each. 

The  present  gross  zvorth  of  the  firm  is  found  by  finding  the  difference  be- 
tween the  sum  total  of  its  Liabilities  and  the  sum  total  of  its  Resources, 
Private  accounts  included. 

The  present  net  worth  of  the  firm  is  found  by  finding  the  sum  total  of  all 
the  amounts  credited  to  each  of  its  members  as  his  present  net  worth,  /.  e., 
after  such  accounts  have  been  closed  as  per  instructions  in  "Jth"  of  this  article. 

.  856.  When  there  is  but  a  single  proprietor,  there  are  some  who  do  not 
keep  a  Stock  account,  and  a  few  who  keep  neither  a  Stock  nor  a  Private  ac- 
count, but  charge  amounts  drawn  for  private  use  to  no  account — simply  writing 
"Private  use,"  or  something  similar,  on  the  Cash  Book;  this  is,  however,  a  very 
loose  system  of  book-keeping,  affording  no  satisfaction  whatever  to  the  bus- 
iness man  other  than  merely  showing  him  the  personal  accounts  owing  to  and 
by  him.  When  no  Private  account  has  been  kept,  there  is  no  way  of  finding 
how  much  has  been  expended  for  private  use,  unless  an  account  had  been  kept 


85G 

TO 

858 


DOUBLE   ENTRY  BOOKKEEPING. 

called  "Private  Expenses;"  neither  can  the  amount  gained  or  lost  in  the  bus- 
iness be  ascertained,  for  the  reason  that  the  amount  drawn  for  private  use  has 
been  taken  from  the  business  and  no  account  made  thereof 

856  1-2.  If  other  than  personal  accounts  have  been  kept,  such  as  Expense, 
Merchandise,  etc.,  the  balances  from  such  accounts  must  not  be  carried  forward 
to  the  new  double/entry  books  or  accounts,  but  such  old  accounts  or  old  bal- 
ances must  be  dropped,  abandoned,  for  the  reason  that  they  were  kept  in 
Single  Entry  simply  as  memorandum  accounts,  in  order  that  the  firm  might 
know  what  their  expenses  and  sales  were. 


ON  "MAKING  THE  CASH." 

857.  It  is  best  to  balance  the  Cash  Book  every  day,  although  some  firms 
balance  it  only  once  a  month.  Whether  we  balance  the  book  every  day  or 
not,  we  should  every  night  see  whether  the  balance  on  hand  as  shown  by 
the  Cash  Book  agrees  with  the  amount  we  actually  have  on  hand.  Would 
recommend  the  following  described  and  illustrated  method  of  finding  whether 
or  not  the  cash  balances:  Take  a  slip  of  paper  and  put  down  in  figures  at  the 
left,  as  illustrated  below,  first,  the  balance  we  had  on  hand  in  the  morning,  and 
under  this  the  total  cash  received  during  the  day;  add  these  amounts  together; 
then  under  this  sum  just  found,  enter  the  total  cash  paid  out  during  the  day, 
which  amount  subtract  from  the  sum  above  it  which  will  give  the  amount  of 
cash  we  ought  to  have  on  hand.  Then  put  down  in  figures  at  the  right  on  the 
shp,  as  illustrated  below,  first,  the  balance  in  the  bank  as  shown  by  the  Check 
Book,  then  the  amounts  of  all  checks,  drafts,  etc.  (called  cash),  and  the  cash 
we  have  in  the  cash  drawer,  after  which  find  the  amount  of  cash  on  hand 
we  actually  have  by  finding  the  total  of  these  amounts,  the  sum  of  which  total 
should  just  agree  with  the  balance  on  hand  as  shown  by  the  Cash  Book  and 
indicated  in  the  figures  at  the  left  on  the  slip.  (See  below;  also,  in  the  Cash 
Book,  48s,  548,  551  and  552.) 

S3, 000  00  $3,240  80  b.-ink 
4,268  81  104  00 
22  30 

7,268  81  86  40 

3,492  31  S  00 

. 318  00  cuiiency 

3,776  50  

3.776  50 

858.  Handling  the  Cas/i.—U  the  cashier  is  to  be  responsible  for  the  cash, 
no  other  person  should  be  permitted  to  handle  it,— then  if  any  errors  occur 
by  which  the  Cash  Book  and  cash  do  not  agree,  he  may  justly  be  held  account- 
able for  same. 

If,  on  the  other  hand,  everybody  in  the  store  is  allowed  to  go  to  the  cash 
drawer  to  make  change  and  pay  out  and  receive  cash,  it  is  then  impossible,  if 
an  error  be  made,  to  know  by  whom  it  was  made. 

1^4 


859 


DOUBLE   ENTRY  BOOKKEEPING. 

»  If  the  balance  called  for  by  the  Cash  Book  does  not  agree  with  the  cash 
actually  on  hand,  and  the  cashier  after  diligent  search  does  not  find  the  error, 
he  may  make  it  agree  in  the  following  described  manner:  If  Cash  is  Over. — 
If  the  cash  is  over,  /.  e.,  more  cash  on  hand  than  is  called  for  by  the  Cash 
Book,  the  amount  over  may  be  credited  to  the  Merchandise  account  by  writing 
on  the  debit  side  of  the  Cash  Book,  "To  Mdse. — Cash  over  could  not  account 
for,"  and  the  amount,  and  this  will  make  them  agree;  afterward,  if  the  error  is 
found  for  this  amount,  the  proper  account  may  be  credited  and  Merchandise 
debited.  If  Cash  is  Short.— If  the  cash  is  short,  z.  e.,  less  cash  on  hand  than 
is  called  for  by  the. Cash  Book,  the  thoroughly  conscientious  cashier  will  charge 
the  amount  short  to  his  own  account,  by  writing  his  name  on  the  credit  side 
of  the  Cash  Book,  adding,  "Cash  short  could  not  account  for;"  and  afterward 
if  the  error  be  found,  will  debit  the  amount  to  the  proper  account  and  credit 
his  account  for  the  same — this  is  not  done,  however,  until  after  he  has  made 
diligent  and  thorough  search  and  is  finally  obliged  to  "give  up  in  despair." 
The  reasons  why  he  should  do  so  arc:  He  might  have  made  the  error  in 
making  change;  or,  in  paying  an  account  and  not  charging  the  person;  or,  in 
paying  a  person  more  than  he  charged  them. 


SHORT  CALCULATION. 

ADDITION. 

859.  In  adding  a  column  of  figures  you  should  learn  to  do  it  without  men- 
tal labor;  and,  this  may  be  acquired  by  anj  one  with  a  little  practice.  The  art 
is  acquired  by  learning  to  read  di  column  of  figures  as  you  would  a  sentence 
in  prose,  ^y  practice  you  have  become  so  familiar  with  letters  that  when  you 
see  a  group  of  them  together  it  is  not  necessary  for  you  to  stop  and  separate 
the  letters,  but  you  can  tell  at  a  glance  what  the  word  is.  By  practice  you 
may  become  so  familiar  with_;f^//;r.f  that  when  you  see  a  group  of  them  you 
can  tell  at  a  glance  what  the  sum  of  them  is.  In  practicing  the  reading  of  a 
column  of  figures  in  this  way,  do  not  let  your  brain  work  at  all,  but  simply 
pass  your  eyes  over  the  figures  as  if  you  were  reading  a  sentence,  not  reading 
too  slowly,  and  you  will  yourself  be  surprised  to  find  how  readily  you  may  ac- 
quire the  art.  First,  begin  with  practicing  on  two  figures,  then  on  three,  four, 
five  and  so  on,  until  finally  you  will  become  able  to  write  the  sum  total  of  a  whole 
column  without  once  having  thought  of  an  amount  until  you  have  the  entire 
product.  For  example:  When  you  see,  one  above  the  other,  the  following 
figures,  9,  9,  5,  5,  you  know  at  a  glance  that  the  sum  is  28.  The  reading  of  a 
column  of  figures,  as  in  the  reading  of  a  sentence,  is  done  by  dividing  a  large 
group  of  figures  into  smaller  groups,  and  from  group  to  group  reading  through 
a  column  the  same  as  from  word  to  word  we  read  through  a  sentence.  Another 
example:  9,  6,  4,  2,  8, — in  this,  we  group  the  last  four  figures,  and  by  taking 
them  all  into  our  eye  at  once,  we  see  that  the  sum  of  them  is  20,  then  we  have 
but  to  say  20-9  or  29.     The  expert  in  addition,  will  skip  around  "here,  there 


DOUBLE   ENTRY   BOOKKEEPING. 

and  everywhere"  in  order  to  do  this  grouping,  and  will  sometimes  go  back  t^p 
the  beginning  of  a  column  to  pick  up  a  stray  figure  that  he  had  left  behind. 
In  finding  the  sum  total  of  several  long  columns  of  figures,  it  is  well  to  set 
down,  one  under  the  other,  the  total  of  each  column;  then,  after  the  sum  total 
of  the  last  column  at  the  left  has  been  found,  the  grand  total  or  product  will 
be  the  sum  total  of  the  extreme  left  hand  column,  with  the  unit  figure  of  each 
of  the  preceding  totals  affixed— one  after  the  other,  reading  upward.  For  ex' 
ample:  We  will  suppose  the  following  amounts  to  be  the  sums  total  of  certain 
columns  of  figures  in  an  example,  and  that  they  come  in  order,  one  under  the 
other,  as  here  placed,  98,  120,  65,  24,— the  sum  total  is  24508.  In  putting 
down  the  sum  total  of  each  column  in  this  manner,  the  amount  to  be  carried  to 
the  next  column  is  the  figures  to  the  left  of  the  unit  number — in  the  first  above, 
it  is  9;  in  the  second,  12,  and  so  on.  The  object  in  putting  down  the  totals 
in  this  manner  is,  that  if  in  going  over  the  addition  a  second  time,  the  second 
addition  does  not  agree  with  the  first,  we  are  not  obliged  to  commence  again 
from  the  beginning,  but  may  commence  with  the  figures  to  the  left  of  the  unit 
number  in  the  column  preceding  and  "try  it  again." 

MULTIPLICATION. 

860.  To  multiply  by  any  number  between  10  and  20,  multiply  by  the  unit 
figure;  set  the  product  thus  found  one  place  to  the  right,  under  the  multipli- 
cand, and  add.  The  sum  will  be  the  answer.  For  example :  In  multiplying 
324  by  17,  we  simply  multiply  by  7  in  the  manner  above  indicated,  thus: 


In  order  to  give  an  idea  of  rapid  calculation  in  multiplication  a  few  exam- 
ples will  here  be  given,  and  from  these  others  may  be  created  without  limit 
by  any  one : 

35  yards  cloth  @  S2.50.      AJil  one  cipher  and  divide  by  4.      Answer,  Sy/,  or  SS7.50. 

432 
216     "  "     .(3)52-25.      Multiply  2>4'$  by  setting  down  the  amounts  thus:        54 

S4S6 
48     "  "      @  $2.12;^.     Multiply  by  2>sS  in  same  manner  as  by  2^4$. 

55     "         "      @  $1.95.     Move  decimal  point  in  price  two  places  to  the  right,  divide  195  by  2  and 
add^Vll'"^:  97-5° 

9-75 
$107.25 

324 
162  yards  cloth  @  Si. So.     Multiply  by  2  and  deduct  ^l_  thus :         32-40 

$291.60 
72 

36  "  "      @  $1-75.      M-.iltiply  by  2  and  deduct  J^,  thus:       9 

S63 

29 
29     "  "      (Si  $1.62 'A.     Add  '-<  and  Js  lollie  whole,  thus:  14-50 

S47-12 
114.50 
ll4yi  yards  cloth  @  $1.50.     Add  V-i,  thus:  57.25 

S>7i-75 

126 


DOUBLE  ENTRY  BOOK  KEEPING. 


861 


37U  yar'ls  clolh  @  Si-25-     AiUl  ,'^,  thus: 


@  Si 


3775 

9-44 

547'9 

83 
;hus:  16.60 

S99.60 
of  Si  18=559. 


$1.14.     Deduct  from  Si  14,  ,'+  of  that  amount,  thus:      28.50 

S85.50 


23 
230 
$25.30 


24 

"      @95c. 

Deduct  ,',  from  S24 

thus:                  1.20 
$22.80 

68K     " 

"      @  75c. 

Deduct  >4',  thus: 

68. 50 
17.12 
$5'-3S 

46        " 

"     @  55C. 

Find  '/i  and  add  to  s 

ame  I'-ji  thus : 

45c.     Find  yi  and  deduct  jfj,  thu 


a  25c.     Find  }4  of  $96=S24. 

The  reasons  for  making  the  computations  in  this  manner  will  at  once  be 
apparent,  from  the  fact  that  when  the  price  is  either  more  or  less  than  $1,  the 
fractional  part  of  a  dollar  is  either  taken  from,  or  added  to,  the  amount  that 
the  sum  would  be  if  @  $1  per  yard.  It  is  sometimes  more  convenient  to  call 
the  number  of  yards  the  price,  and  the  price  the  number  of  yards,  in  order  to 
make  the  computation,  as  in  the  example  above;  50  yards  @  $1.18  would  be 
the  same  as  Ii8  yards  @  50c.;  or  to  say,  if  1 00  yards  @  $1.18  would  be  $u8, 
50  yards  would  be  half  of  that  amount,  or  $59.  In  the  first  example  we  say, 
if  35  yards  @  $10  per  yard  would  be  $350,  at  $2.50  per  yard  it  would  be  one- 
fourth  of  that  amount,  or  $87.50. 

INTEREST. 

S61.  To  find  the  interest  on  any  amount,  at  any  rate  per  cent.,  for  any 
length  of  time : 

First  Reduce  time  to  run  on  interest  to  months  and  tenths  of  a  month. 
To  find  the  number  of  tenths  of  a  month,  divide  the  number  of  days  over  a 
month  by  l/irce,  then  add  to  the  number  of  months  the  tenths,  in  decimal  fonn. 

Second.  Move  the  decimal  point  between  dollars  and  cents  in  the  prin- 
cipal two  places  to  the  left,  divide  this  ainount  by  twelve  and  multiply  by 
the  rate  per  cent.;  multiply  this  amount  by  the  number  of  months,  as  founr 
above,  and  the  product  will  be  the  answer. 

EXAMPLt.— $36o.oo@7  ^  cent,  for  z  years,  5  months  and  18  days. 
Solution.— 2  years,  5  months  and  18  days  equals  29.6  months. 

12)3.60  (Move  decimal  point  two  places  to  the  left,  which  gives  int.  far  1  jr.  @  l%.) 
.30  (Divide  by  12,  which  gives  int.  for  I  mo.  (d  \%.) 
7  (Multiply  by  the  rate  per  cent.) 
2.  lO^Interest  on  principal  for  one  month. 
If  $2.10  for  one  month,  for  29.6  months  it  would  be  29.6  times  $2.10,  or  $62. 16— Answer. 


862 

DOUBLE   ENTRY   BOOK-KEEPING. 

AT    TEN    PER    CENT. 

First.  Find  the  number  of  months  and  tenths  of  a  month  as  on  preceding 
page. 

Second.  Move  decimal  point  between  dollars  and  cents  in  principal  one 
place  to  the  left,  divide  by  twelve,  then  multiply  this  amount  by  the  number 
of  months,  as  found  in  "first,"  and  the  product  will  be  the  answer. 

E.-CAMPLE.— $6oo.oo@io  ^  Cent.,  from  August  7,  1877,  to  January  28,  1879. 

Solution.— From  August  7,  1877,  to  January  28,  1879,  i^  '  y'^'''>  5  months  and  21  days,  which 
equals  17.7  months. 

12)60.00  (Move  decimal  point  one  place  to  the  left.) 

5.       (Divide  by  twelve.)     Which  equals  interest  on  the  principal  for  one  month. 
If  $5  for  one  month,  for  17.7  months  it  would  be  17.7  times  S5,  which  equals  SS8. 50— Answer. 

Other  E.kamples. — Required,  the  interest  on  a  note  for  $267.50,  running  93  days  at  10  1^  cent.; 
93  days  equals  3.1  months. 
12)26.75 


S6. 9 13— Answer. 
Required,  the  interest  on  a  note  for  $182.39,  running  7  months  and  7  days;  7  months  and  7  days 
equals  7.23  months. 
12)18.24 
'■52 
723 
456 
304 
1064 


$10.9896 — Answer. 

If  the  number  of  days  over  a  month  are  not  divisible  by  three,  continue 
the  decimal  one  or  two  places.  In  many  examples,  both  multiplier  and  mul- 
tiplicand, i.  e.  months  and  rate  per  month,  can  be  calculated  in  the  head. 


VALUABLE  TABLES  FOR  REFERENCE. 


VALUE. 


UNITED    STATES. 


862.    The  term  "currency"  is  applied  to  money  of  all  kinds  employed  in 
trade,  both  coin  and  paper. 


10  mills  (m.)  make  I  cent ct. 

10  cents  "       I  dime d. 

10  dimes  "       I  dollar $. 

10  dollars  "       I  eagle E. 


I2S 


863 

DOUBLE   ENTRY   BOOK  KEEPING.  10 

869 

CANADA. 

863.  The  currency  of  Canada  since  1859  has  been  decimal,  and  the  denom- 
inations the  same  as  those  of  the  United  States. 

864.  ENGLISH. 

TABLE. 

4  farthings  (far.  or  qr.)  make   I   penny d 

12  pence  "       i  shilling s. 

20  shillings  "       i   pound,  or  sovereign. ..  .;^,  or  sov. 

FRENCH. 
805.    The  unit  is  the  Silver  Franc. 

TABLE. 

10  miUimes  make   I  centime ct. 

10  centimes     "       i  decime dc. 

10  decimes       "       I   franc fr. 

A  franc  is  equal  to  S.  193  United  States  currency. 

GERMAN   EMPIRE. 
866.    The  unit  is  the  "Mark,"  equal  to  23.85  cents  United  States  money. 
The  coins  are:     Gold— the  20,  10,  and  the  5-mark  pieces;  Stiver — the  2  and 
the  i-mark,  and  the  20-penny  pieces;  Nickel — the   10  and  the  5-penny,  and 
pieces  of  less  value. 


MEASURES  OE  EXTENSION. 

867.  LINEAR. 

TABLE. 

12      inches  (in.)  make  i  foot ft. 

3      feet  "  I  yard yd. 

5^  yards,  or  \(>yi  feet,  "  I  rod    rd. 

40      rods  "  I  furlong    fur. 

8      furlongs,  or  320  rods,     "  I  statute  mile mi. 

868.  The  following  denominations  are  also  in  use : 

3  barleycorns  make  I  inch;  used  by  shoemakers  in  measuring  the  length  of  the  foot. 

4  inches  make  1  hand;  used  in  measuring  the  height  of  horses  directly  over  the  fore  feet. 
6  feet  make  I  fathom;  used  in  measuring  depths  at  sea. 

1. 15  statute  miles  make  i  geographic  mile;  used  in  measuring  distances  at  sea. 

3  geographic  miles  m.ike  i  league. 

60  geographic  miles  make  i  degree  I,  ^f  j^^j^^^j^  ^„  ^  ^^^^.^.^^^  ^^  ^^  longitude  on  the  equator. 

Og.  16  statute       "         n  i<        ) 

360  degrees  make  the  circumference  of  llie  earth. 

869.  surveyor's  lonc;. 

TAISLE. 

7.92  inches    (in.)         make  I   link 1'. 

25       hnks  "  I   rod rd. 

4        rods,  or  66  feet,       "  1   chain ch. 

80       chains  '  i   mile mi. 

129 


870 

TO 

874 


DOUBLE    ENTRY    BOOKKEEPING. 
870.  SQUARE. 


TABLE. 

144      square  inches 

9      square  feet 
30X  square  yards 
40      square  rods 
4      rood. 

(sq.  i 

1.)  make 

square  foot, 
I  square  yard, 
I  square  rod, 
I   rood, 
I   acre. 

marked  sq.  ft. 

"    sq-  yd- 

"      sq.  rd 
R. 
A 

640      acres 

.   square  mile, 

"      sq.  mi 

lake 

I  pole 

P. 

I  square  chain. . . 
I  acre. 

sq.  ch. 

...      .A. 

" 

I   square  mile 

. . .  .sq.  mi. 

SURVEYOR'S   SQUARE. 

871.  Used  in  computing  the  area  or  contents  of  land. 

TABLE. 
625  square  Imks  (sq.  1.) 

16  poles 

10  square  chains 
640  acres 

36  square  miles  (6  miles  square)      "        I   township Tp. 

A  square  mile  of  land  is  also  called  a  section. 

CUBIC. 

872.  Used  in  estimating  the  contents  of  soHds,  as  timber,  wood,  etc. 

TABLE. 

1728      cubic  inches  (cu.  in.)  make   I   cubic  foot cu.  ft. 

27      cubic  feet  '■        I   cubic  yard cu.  yd. 

j6      cubic  feet  "        I   cord  foot cd.  ft. 

8      cord  feet,  or  j  ..       ,   ^^^^,  „f  ^^.„„j ^j 

128      cubic  feet,      \ 
H}i      cubic  feet  "       I   perch  of  stone  or  masonry. ..  .pch. 

A  load  of  earth  is  one  cubic  yard. 

A  pile  of  wood  8  feet  long,  4  feet  -ft-ide  and  4  feet  high  is  a  cord. 
A  perch  of  stone  or  of  masonry  is  l6yi  feet  long,  1}^  feet  wide  and  i  foot  high. 


MEASUREMENTS  OF  CAPACITY. 


873.  LIQUID. 

TABLE. 

4      gills  (gi.)                         make  I  pint pt. 

2      pints                                     "  I  quart qt. 

4      quarts                                   "  I  gallon gal. 

3il^gallons                                 "  I  barrel l)bl. 

2     ban-els,  or  63  gallons,      "  i  hogshead hhd. 

874.  The  following  dimensions  arc  also  in  use: 

TABLE. 

36  gallons  make  I  barrel  of  beer. 

54  gallons,  or  lyi  barrels,  "  I  hogshead  of  beer. 

42  gallons  "  I  tierce. 

2  hogsheads,  or  120  gallons,     "  I  pipe  or  butt. 

2  pipes,  or  4  hogsheads,  "  I  tun. 

i",o 


DOt'liLE    ENTKV    HOOK  KKliPING. 


WHIGHTS. 


875 

TO 

879 


875.    Used  in  weitjhing  gold,  silver,  and  jewels,  etc". 


24  grains  (gr.)       make   I   pennyweight pwt.  or  dwt. 

20  pennyweights      "        I  ounce oz. 

12  ounces  "       I  pound lb. 

t75  pounds  troy         =144  pounds  avoirdupois. 

APOTHEC.\RIES. 
Used  by  apothecaries  and  physicians  in  compounding  medicines. 

TABLE. 

20  grains  (gr.)  make   I  scruple sc. 

3  scruples  "  dram dr. 

12  ounces  "  pound lb.  or  lb. 

AVOIRDUPOIS. 


i77.    Used  for  general  purposes  of  weighing. 


16  drams  (dr.) 
16  ounces 
100  pounds 


TABLK. 

make   I   ounce. . 
*'        I   pound. 


I    hundred  weight.,  .c 


■  bis 


878. 


LONG    TON    TABLE. 

28  pounds  make  I  quarter.  ..marked. .  .qr. 
4  quarters — 112  lbs.  "  i  hundred  weight. .  .cwt. 
20  cwt. — 2240  lbs.  "       I   ton T- 

The  following  denominations  are  also  in  use: 

TABLE. 
100  pounds  of  grain  or  flour  make   I  centnal. 


100 

dry  fish 

'       I  quintal 

100 

nails 

•       .  keg. 

196 

flour 

'       I  barrel. 

200 

pork  or  beef 

I  barrel. 

240 

lime 

'       I  cask. 

879. 


TIME. 


60  seconds  (si 
60  mmutes 
24  hours 
7  days 

365  days 

366  days 

12  calendar  n 
100  years 


h 

'     1  d^y 

'       I  week... 
1   common 

year 

..da 
.wk 
..yr 

'       I   century. 

..C 

880 
884 


DOUBLE   ENTRY   BOOKKEEPING. 

CiRCriAK. 

).    Used  in  surveying,  navigation,  astronomy,  and  geography. 


881. 


6o  seconds  (")  mak 

6o  minutes  " 
30  degrees 

12  signs,  or  360°,  " 


degree °. 

sign S. 

circle C. 


COUNTING 


12  units,  or  tilings,  make  i  dozen. 

12  dozen  '•  I  gross. 

12  gross  "  I  great  gross. 

20  units  "  I  score. 


PAPER. 


24  sheets.  . . 

20  quires 
2  reams 
5  bundles 


quire. 


I  bundle 
I   bale. 


BOOKS. 

883.    The  terms  folio,  quarto,  octavo,  dHodccimo,  etc.,  show  the  number  of 
leaves  into  which  a  sheet  of  paper  is  folded. 

A  sheet  folded  in    2  leaves  is  called  a  folio. 

A  sheet  folded  in    4  leaves  is  called  a  quarto,  or  410. 

A  sheet  folded  in    8  leaves  is  called  an  octavo,  or  8vo. 

A  sheet  folded  in  12  leaves  is  called  a  i2mo. 

A  sheet  folded  in  16  leaves  is  called  a  i6nio. 

A  sheet  folded  in  18  leaves  is  called  an  l8mo. 

A  sheet  folded  in  24  leaves  is  called  a  24mo. 

A  sheet  folded  in  32  leaves  is  called  a  32mo. 


PORHIGN  MONEY. 

884.    Value  of  foreign  money  on  a  gold  basis. 

Pound  Sterlnig,  of  England S4.S6O5 

Guinea,  "         5  05 

Crown,  "         '  -' 

Shilling,  "         24 


DOUBLE    ENTRY    BOOK-KEEPING, 

Napoleon,  of  France 3-84 

Five  Francs,       "        93 

Franc,  "        IQ3 

Mark,  Germany 238 

Guilder,  of  Netherlands 40 

Ducat,  of  Austria 2  •  28 

Doubloon,  of  Spain  (1800) 15-54 

Real,  "  °5 

Five  Rubles,  of  Russia 3-95 

Ruble.  •'     75 

Franc,  of  Belgium '93 

Ducat,  of  Bavaria 2.27 

Franc,  of  Switzerland -193 

Crown,  of  Tuscany i  055 


881» 


VALUE  OF  UNITED  STATES  MONEY. 

885.  GOLD   COIN   U.   S.   STANDARD. 

Double  Eagle S20.00 5>6  grains. 

Eagle 10  00 258      " 

Half  Eagle 50° '29       " 

Three  Dollar  piece 3  0° 77-4" 

Quarter  Eagle :       250 64.5" 

Dollar 100 25.8" 

Value  per  grain 0.03S7596 I       " 

Value  per  ounce 18.6046       480 

886.  SILVER  COIN   U.   S.   STANDARD. 

One  Dollar  (Trade) 100  cents 420  grains. 

One  Dollar  (Legal  Tender) 100      "     ^^2'^    " 

Half  Dollar  (5  dimes) 50      "     "92 

Quarter  Dollar  (2>^  dimes) 25       "     9^ 

One  Dime 10      "     38-4    " 

Half  Dime 5      "     '9-2    " 

Three  Cent  piece 3      "     11.52" 

Value  per  grain 00260416 > 

Value  per  ounce i  .25   4S0 

887.  COPPER    COIN. 

Copper  Cent i   cent 168  grains. 

Value  per  grain 0.005952  i       " 

888.  The  standard  fineness  of  gold  and  silver  is  one  weight  alloy  to  nine 
of  pure  metal.  The  alloy  for  gold  is  silver  or  copper.  Alloy  for  silver  is 
copper. 

ON  AVERAGING  ACCOUNTS. 

889.  Averaging  accounts  or  equation  of  payments  consists  in  finding  the 
common  time  of  maturity  of  bills  due  at  different  times.  The  method  most 
commonly  in  use  for  finding  average  date  of  payment  is  the  "Interest  Method," 
which  method  will  be  hereinafter  described  and  illustrated.  Any  rate  per 
cent,  of  interest  may  be  used  in  order  to  arrive  at  the  result,  but  one  per  cent. 


890 

TO 

896 


DOUBLE   ENTRY   BOOK- KEEPING. 

per  month  is  thought  to  be  the  best  rate,  for  the  reason  that  a  result  may  be 
found  quicker  with  that  rate  than  any  other.  The  method  of  figuring  at  this 
rate  will  be  hereinafter  described. 

890.  The  kind  of  an  example  that  most  commonly  presents  itself,  is  the 
one  in  which  there  are  several  bills  either  bought  by  us,  or  sold  by  us  on  time; 
and  for  which  bills  we  wish  to  ascertain  the  common  date  due,  or  the  date 
upon  which  the  sum  total  of  all  the  bills  will  be  due— our  object  in  finding  this 
date  being  in  order  that  we  may  give  a  note,  or  accept  a  draft  if  it  be  an  ac- 
count we  owe;  or  take  a  note  from,  or  make  a  draft  on  the  person  if  it  be  an 
account  that  is  owing  us.  The  rules  for  finding  the  average  date  due  for  this 
kind  of  an  example  will  here  be  given,  and  following  same  will  be  an  illustra- 
tion in  the  form  of  an  account  wc  owe. 

891.  1st.— Find  the  dates  the  bills  are  due,  and  write  the  same  on  a  slip  of 
paper,  with  the  amounts  opposite. 

892.  2d.^Take  the  bill  latest  due  as  the  basis  upon  which  to  work.  It  is 
advisable  to  indicate  this  "basis"  by  boxing  it,  or  drawing  a  line  around  it. 

893.  3d.— Find  the  number  of  days  each  bill  falling  due  previous  to  the 
"basis"  has  to  run  from  its  date  due,  up  to  the  "basis,"  and  compute  interest  on 
same  at  the  rate  of  one  per  cent,  per  month,  calling  a  month  jo  days;  after 
ivhich,  find  the  sum  total  of  these  several  interest  amounts. 

894.  4th.— Find  the  sum  total  of  all  the  bills;  then  cut  off  or  draw  a  line 
through  the  cents  and  the  unit  number  of  the  dollars.  After  which,  divide 
this  amount  by  3,  place  the  decimal  point  two  places  to  the  left  in  the  pro- 
duct thus  found,  which  will  give  the  interest  on  the  total  amounts  of  the  bills 
for  one  day  at  one  per  cent,  per  month. 

895.  5th.— Divide  the  sum  total  of  the  interest  due  on  all  the  bills  as 
found  in  893,  by  the  interest  on  all  the  bills  for  one  day  as  found  in  894,  and 
the  product  thus  found  will  be  the  number  of  days  to  count  backward  from 
the  "basis"  (892)  to  find  the  average  date  of  payment,  or  the  date  all  the  bills 
fall  due  by  equation. 

896.  ILLUSTRATION.— F.  CLEMMONS. 


] 

188.. 

1 

1 

I    Jan'y 

s ; 

60  days. 
30      •■ 

24 

|46 

200         00 

Feb'y 

H 

90      ■■ 

h'l' 

330     ioo 

March 

1     6' 

60      •• 

'65' 

=30    Ic 

(See  891  and  892.)     (See  893.) 

March  C, 


Feb'y  19, 
I  Mayisj 
"May  5. 


$200 
'50 
320 
230 

(See  894.)  3  )9°|o 

•30 
This  gives  32  days  to  count  hackw, 
*-he  average  date  the  bills  are  due,  wlii 


70  days, 
Ss     •' 


$4.67 
425 


30)9.68      (See  895.) 


rd  from  the  "basis"  (May  15th)  to  find 
:h  is  April  Ijtli. 


34 


DOUP.LE   ENTRY    BOOK-KEEriNC;. 

897.  Anot/icr  Exawph.-  '\'\ierQ  \s  another  example  that  occurs  less  fre- 
quently, viz.:  One  which  arises  from  accounts  current,  i.  e.,  accounts  with 
persons  to  whom  we  sell  goods  on  time  and  from  whom  we  buy  goods  on  time, 
also  cash  is  paid  on  account  by  us  or  by  them.  Finding  the  average  date  of 
payment  on  an  account  of  this  kind  consists  in  finding  the  date  upon  which 
the  balance  or  the  difference  between  the  two  sides  is  due,— the  rules  for  find- 
ing same  and  the  illustration  are  as  follows: 

898.  1st.— Find  the  dates  the  bills  are  due,  and  write  the  same  on  a  slip, 
of  paper,  with  the  amounts  opposite— taking  first  one  side  of  the  account  and 
then  the  other.  If  any  cask  payments,  the  dates  put  down  on  this  slip  for 
same  are  the  dates  upon  which  the  payments  were  made. 

899.  2d.— Same  as  892— this  "basis"  being  found  cither  on  the  debit  side 
or  the  credit,  whichever  presents  the  bill  latest  due. 

900.  3d.— Same  as  893— taking  first  one' side  of  the  account,  and  then  the 
other,  and  keeping  the  figuring  for  the  two  sides  separate. 

901.  4th.— Find  the  difference  between  the  sum  total  of  the  interest  for 
the  debit  side  of  the  account  and  the  sum  total  of  the  interest  for  the  credit 
side  of  same. 

902.  5th.— Find  the  difference  between  the  two  sides  of  the  account;  then, 
cuf.  off  or  draw  a  line  through  the  cents  and  the  unit  number  of  the  dollars, 
after  which,  divide  this  difference  by  3,  place  the  decimal  point  two  places  to 
the  left  in  this  product,  which  will  give  the  interest  on  this  balance  for  one  day 
at  one  per  cent,  per  month. 

903.  6th.— Divide  the  balance  of  interest  as  found  in  901,  by  the  interest 
on  the  balance  of  account  for  one  day,  as  found  in  902,  and  the  product  thus 
found  will  be  the  number  of  days  to  count  backward  from  the  "basis"  (as  found 
in  899)  to  find  the  average  date  of  payment,  or  the  date  the  account  is  due 
by  equation. 

904.  ILLUSTRATION.— S.  ^L  HUBBARD. 


897 

904 


188.. 



1 

1881. 



Jan-y 

60 

38 

350 

00 

Jan'y 

8 

90  days. 

46 

240 

00 

•• 

65 

300 

00 

23 

"      " 

59 

150 

00 

Feb. 

7 

Cash 

00 

Feb. 

JO 

Cash 

JO 

100 

00 

M.irch 

60 

83 

00 

"• 

00 

April 

5 

30 

" 

190 

00 

Dr. 
(See  898.) 

March    6,       $350 64  days,     S7.47 

"     31.         200 39     "  2.60 

Feh'y     7,         140 91     "  4.25 

I    May  9,    j  HO 

^'      sT'     29° 4  ilays,  .39 


Cr. 

(See  898.) 
Apvil     8,       S240.  ■ 

■'      23,         150.. 
Feb'y  10,  lOO.  . 

49<* 


.31.  $248 

.16,  .80 

.88,  2.93 


{See  902)        .:090 

.190 

3)6o|o 


14.71  (See  900  and  901). 

6.21 
))8.50  (See  903). 


909 


DOUBLK   ENTRY   BOOK  KEEPING. 

This  gives  42  days  to  count  backward  from  the  "basis"  (May  9th)  to  find 
the  date  upon  which  the  account  is  due  by  equation,  or  the  average  date  of 
payment,  which  is  March  28th. 

905.  On  averaging  a  past-due  account,  for  the  purpose  of  finding  the 
interest  due,  the  average  date  when  the  account  was  due  is  first  found,  after 
which  we  compute  the  interest  on  the  account  from  that  date  up  to  the  pres- 
ent at  whatever  rate  per  cent,  agreed  upon;  then,  if  it  be  an  account  owing 
us,  we  charge  the  same  for  the  interest  thus  found;  or  if  it  be  an  account  we 
owe,  we  credit  the  same  for  the  interest. 

906.  On  averaging  an  account  not  yet  due,  for  the  purpose  of  settling  by 
note  or  acceptance,  the  average  date  when  the  account  will  be  due  is  first 
found;  then  the  note  is  either  dated  backward  from  that  date  the  number  of 
days  we  wish  the  note  to  run,  or  dated  on  the  present  date,  and  made  to  read 
in  such  a  manner  that  it  will  fall  due  on  the  average  date  due. 

907.  The  three  days  of  grace  is  not  added  when  averaging  an  account; 
but  it  may  be  added  after  the  average  date  is  found,  if  we  wish  to  do  so. 

90S.  Explanation  of  the  "Interest  Method"  of  A^'eraging  Accounts. — We 
find  the  bill  latest  due,  and  taking  this  as  a  basis  or  foundation  upon  which 
to  work,  suppose  all  amounts  prior  to  that  to  run  from  their  respective  dates 
due  up  to  this  "basis"  date  before  they  are  paid,  and  thereupon  we  charge  or 
credit,  as  the  case  may  be,  interest  on  such  amounts  for  the  time  they  thus 
run  past  due.  After  we  have  thus  found  the  total  interest  due,  we  find  the 
interest  on  the  amount  of  the  account  for  one  day.  Now  we  see  by  paying 
the  sum  total  of  all  the  bills  just  one  day  backward  from  this  "basis"  date, 
there  will  be  due  the  interest  for  one  day  less,  and  consequently,  we  ascertain 
how  many  days  backward  from  this  "basis"  date  we  will  have  to  pay  the  total 
amount  of  the  bills  in  order  to  consume  all  the  interest,  so  that  there  would 
be  interest  neither  owing  to  nor  by  us,  by  dividing  the  total  interest  due  by 
the  interest  on  the  whole  for  one  day. 

909.  On  Computing  Interest  at  i  per  cent,  per  Month  or  12  per  cent,  per 
Annum. — We  call  a  month  thirty  days;  therefore  at  this  rate  per  cent,  the 
principal  earns  1  per  cent,  every  30  days,  and  ^V  percent,  every  3  days;  con- 
sequently, to  find  the  interest  for  30  days,  we  simply  move  the  decimal  point 
between  dollars  and  cents  two  places  to  the  left,  and  for  3  days  we  move 
it  three  places  to  the  left.  With  a  very  little  practice,  interest  may  be  very 
rapidly  computed  at  this  rate  per  cent.  In  the  example  under  904,  we  first 
find  the  interest  for  30  days  on  $350,  which  is  $3.50;  for  60  days  it  is  twice 
that  amount,  or  $7.00;  and  for  3  days,  35c.;  and  i  day,  J  of  35c.,  which  is  12c. 
Then  we  add  60  days,#$7.00;  3  days,  35c.;  I  day,  12c.;  total  64  days,  $7.47. 
Then  $2.00,30  days;  and  for  3  days, 20c.;  9  days, three  times  3  days,  andconsc- 
quently  three  times  20c.,  or  60c.  Then  we  add  30  days,  $2.00;  9  days,  60c.; 
total  39  days,  $2.60.  Then  if  $1.40  for  30  days,  for  90  days  it  is  three  times 
that  amount,  or  $4.20;  and  if  14c.  for  3  days,  it  is  3  of  that  amount  for  i  day, 
or  5c.;  total 91  days,  $4.25. 

136 


no 

DOUELE   KNTRV   LOOK  KEEl'ING. 

$290  for  3  days,  2C)c. 

••    I  day,  add  %  of  amount  for  3  days,        10 

39c- 

J240  for  30  days,  S2-40 

"     3  days  24c.;  for  i  day  '/i  of  24c.  8 

S2,48 
$150  for  30  days,  Si. 50;  for  15  days,  '4  of  Si. 50,  or       75c. 
'•     3  days,  15c.;  for  i  day,  Jj  of  15c.,  5 


$100  for  30  days,  gi  00;  forgo  days,  S3.cx3 

'■     3  days,  lOc;  for  2  days,  5^  of  lOc,  7 

S2  93 
The  foregoing  illustration  is  deemed  sufficient  to  make  perfectly  clear  to 
the  mind  the  i  per  cent,  method  of  figuring  interest,  and  when  by  continued 
';ractice  the  method  has  been  thoroughly  mastered,  the  old  torttire  of  averag- 
ing accounts  is  rendered,  on  the  contrary,  a  pleasure. 


RULE-TABLE  FOR  AVERAGING  ACCOUNTS. 

910.  In  some  cases  interest  may  be  more  expeditiously  computed  by 
first  finding  the  interest  for  i  day  and  then  multiplying  this  amount  by  the 
number  of  days. 

To  find  the  interest  for  i  day  (at  i  per  cent,  per  month),  move  the 
decimal  point  between  dollars  and  cents  in  principal  three  places  to  the  left 
and  divide  by  3. 

(i)  Principal  Divisible  by  j.  — When  the  principal  is  divisible  by  3 
without  a  remainder,  find  the  interest  for  i  day  and  then  multiply  this 
amount  by  the  number  of  days.  Example  :  $240  for  3 1  days.  .24  ^  3  ==  8  or 
8c  ;     .8x31  =2.48,  or  $2.48,  Ans. 

(2)  Days  Divisible  by  j.— When  the  days  are  divisible  by  3,  reduce  the 
same  to  months  and  tenths  of  a  month  (see  861),  then  move  the  decimal 
point  between  dollars  and  cents  in  the  principal  two  places  to  the  left  and 
multiply.  Example:  $200  for  39  days.  39  days=i.3  months;  decimal 
point  moved  two  places  in  principal  gives  $2  ;     1.3  x  2  =  2.6  or  $2.60,  Ans. 

(3)  When  one  knows  the  way,  'tis  better  to  go  through  the  wood  than 
around  it ;  therefore,  since  there  may  be  a  few  paths  that  have  not  as  yet 
been  discovered  by  my  brother  huntsmen,  I  will  here  endeavor  to  direct 
them  to  the  same  : 

To  find  the  interest  on  — 
$1,  $10,  $100,  $1000.— Add  two  ciphers  to  days,  divide  by  3,  then  — for  $I, 

point  off  5  places;    $10,  4  pi.;    $100,  3  pi.;    $1000,  2  pi.     Example:    $lOO 

for  88  days.     8800-=- 3  =  2933  ;    3  places  pointed  off  for  interest  on  $lOO 

gives  2.933  or  $2.93. 
$1.20,  $12,  $120,  $1200.— Multiply  days  by4,  then— for  $1.20,  point  off  4  pi.; 

$12,   3   pi.;     $120,   2   pi.;    $1200,    I    pi.      Example:    $1.20  for   325    days. 

325  X  4=  1300;  4  pi.  off  gives  .1300  or  13c,  Ans. 

137 


910 

DOUBLE   ENTRY   BOOK-KEEPING. 

$1.50,  $15,  $150,  $1500.— Add  two  cii)hers  to  days,  divide  by  2,  then— tor 
$1.50,  point  off  5  pL;  $15,  4  pi.;  $150,  3  pi.;  $1500,  2  pi.  Example: 
SiSO  for  16  ds.     $  1600 -H  2  =  800;  3  pi.  off  gives  .800  or  80c,  Ans. 

$1.80,  $18,  $180,  $  1 800.— Multiply  days  by  6,  then  — for  $1.80,  point  off  4 
pi.;  $18,  3  pL;  $180.  2  pi.;  $1800.  i  pi.  Example:  $18  for  207  ds. 
207x6=1242;  3  pi.  off  gives  1.242  or  $1.24,  Ans. 

$2,  $20,  $200,  $2000. — Add  two  ciphers  to  days,  divide  by  3,  subtract,  then— 
for  $2,  point  off  5  pi.;    $20,  4  pi.;    $200,  3  pi.;    $2000,  2  pi.     Example: 

$200  for  39  ds.    3900-3  =  1300;  3900 1300  =  2600;  3  pi.  off  gives  2.600 

or  $2.60,  Ans. 

$2.10,  $21,  $210,  $2100.— Multiply  days  by  7,  then— for  $2.10  point  off4  pi.; 
$21,  3  pi.;  $210,  2  pi.;  $2100,  I  pi.  Example:  $2100  for  38  days. 
38  X  7  =  266;   I  pi.  off  gives  26.6  or  $26.60,  Ans. 

$2.25,  $22.50,  $225,  $2250. — Add  two  ciphers  to  days,  divide  by  4,  subtract, 
then  — for  $2.25  point  off  5  pi.;    $22.50,  4  pi.;    $225,  3  pi.;    $2250,2  pi. 

Example:  $2250  for  47  days.     4700^4=1175;  4700 1175=3525;  2  pi. 

off  gives  35.25  or  $35.25,  Ans. 

$2.40,  $24,  $240,  $2400.  -Multiply  days  by  8,  then— for  $2.40,  point  off  4  pi.; 
$24,  3  pi.;  $240,  2  pi.;  $2400,  I  pi.  Example:  $240  for  31  ds.  31  x  8  = 
24S  ;  2  pi.  off  gives  2.48  or  $2.48,  Ans. 

$2.50,  $25,  $250,  $2500. —  Add  two  ciphers  to  days,  divide  by  12,  then  — 
for  $2.50,  point  off4  pi.;  $25,  3  pi;  $250,  2  pi.;  $2500,  i  pi. 

$2.62^,  $26.25,  $262.50,  $2625.— Add  two  ciphers  to  days,  divide  by  8, 
subtract,  then  — for  $2.62.^,  point  off  5  pi.;  $26.25,4  p'-i  $262.50,3  pi.; 
$2625,  2  pi. 

$2.66|,  $26.67,  $266.67,  $2666.67.— Add  two  ciphers  to  days,  divide  by  9, 
subtract,  then  — for  $2.66|,  point  off  5  pi.;  $26.67,  4  pl-;  $266.67,  3  pi.; 
$2666.67,  2  pi. 

$2.70,  $27,  $270,  $2700.— Multiply  days  by  9,  then  — for  $2.70,  point  off  4  pi.; 
$27,  3  pi.;  $270,  2  pL;  $2700,  I  pi. 

$2.75,  $27.50,  $275,  $2750.  — Add  two  ciphers  to  days,  divide  by  12,  subtract, 
then  — for  $2.75,  point  off  5   pi.;    $27.50,  4  pi.;    $275,  3  pi.;    $2750,  2  pi. 

$3.  $30,  $300,  $3000.— Add  two  ciphers  to  days,  then  — for  $3,  point  off  5  pi.; 
$30,  4  pi.;  $300,  3  pi.;  $3000,  2  pi. 

$3.25,  $32.50,  $325,  $3250.— Add  two  ciphers  to  days,  divide  by  12,  add, 
then  — for  $3.25,  point  off  5  pi.;    $32.50,  4  pL;    $325,  3  pi.;    $3250,  2  pi. 

$3-30,  $33.  $330,  $3300.— Multiply  days  by  11,  then  — for  $3.30,  point  off  4 
pi.;  $33.  3  pi.;  $330,  2  pL;  $3300,  1  pi. 

138 


91U 

DOUBLE    ENTRY   BOOK-KEEPING. 

$3.333.  $33-33.  $333-33.  $3333-33-— Add  two  ciphers  to  days,  divide  by  9, 
then  — for  $3. 33i,  point  off  4  pi.;  $33-33.  3  pl-;  $333-33.  2  pi.;  $3333-33, 
ipl. 

$3-37i  $33-75-  $337-5o,  $3375-— Add  two  ciphers  to  days,  divide  by  8.  add. 
then -for  3.37.I,  point  off  5  pi.;  $33-75.  4  pl-;  $337-50,  3  pl-i  $3375.  2  pl. 
Example:  $33.75  for  42  ds.  4200^8  =  525;  4200  +  525=4725;  4  pl.  off 
gives  .4725  or  47c,  Ans. 

$3-50.  $35.  $350.  $3500. — Add  two  ciphers  to  ilays,  divide  by  6.  add,  then  — 

for  $3.50,  point  off  5  pl.;  $35.  4  pl-l  $3SO,  3  pl-;  $3500,  2  pi. 
$3.60,  $36,  $360,  $3600.— Multiply  days  by   12.  then— for  $3.60,  point  off  4 

pl-;  $36,  3  pl-;  $360,  2  pl.;  $3600,  1  pl. 
$3-75,  $37-5°.  $375.  $375°- — Add  two  ciphers  to  days,  divide  by  8,  then — 

for  $3.75,  point  off  4  pl.;  $37-50,  3  pl-;  $375,  2  pl.;  $375o,  i  pi. 
$4,  $40,  $400,  $4000. — Add  two  ciphers  to  days,  divide  by  3,  add,  then— for 

$4,  point  off  5  pl.;  $40,  4  pl.;  $400,  3  pl.;   $4000.  2  pl. 

$4.50,  $45,  $450,  $4500. — Add  two  ciphers  to  days,  divide  by  2,  add,  then— for 
$4.50,  point  off  5  pl.;  $45,  4  pl.;  $450,  3  pl;  $4500.  2  pl. 

$5,  $50,  $500,  $5000. — Add  two  ciphers  to  days,  divide  by  6,  then  — for  $5, 
point  off  4  pl.;  $50,  3  pi.;  $500,  2  pl.;  $5000.  i  pl. 

$6,  $60,  $600,  $6000. — Add  two  ciphers  to  days,  multiply  by  2,  then— for  $6. 
point  off  5  pl.;  $60,  4  pl.;  $600,  3  pl.;  $6000,  2  pl. 

$7-50,  $75,  $750,  $7500.— Add  two  ciphers  to  days,  divide  by  4,  then— for 
$7.50,  point  off  4  pi.;  $75,  3  pi.;  $750,  2  pl.;  $7500,  i  pl. 

$9,  $90,  $900,  $9000.— Add  two  ciphers  to  days,  multiply  by  3,  then— for  $9, 
point  off  5  pl.;  $90,  4  pl-l   $900,  3  pl.;  $9000,  2  pl. 

In  order  to  become  familiar  with  these  various  "short-cuts"  in  computing 
interest,  it  will  be  well,  when  averaging  accounts,  to  place  this  list  before 
you ;  then,  whenever  an  amount  occurs  which  is  covered  in  the  above  examples, 
apply  the  rule  following  same  to  ascertain  the  interest. 

The  use  of  this  list  is  recommended  only  as  a  discipline  in  familiarizing 
one  with  the  general  rules  governing  the  one-per-cent  method  of  computing 
interest  ;  for.  after  having  become  thoroughly  acquainted  with  the  method, 
it  is  best  to  discontinue  referring  to  the  list,  since  looking  for  the  amounts 
necessarily  consumes  much  time. 

(^)  Principal  for  Days,  Days  for  Principal.— Ihc  figures  in  the  forego- 
ing examples  are  capable  of  a  double  application  :  whenever  an  amount 
occurs  which  is  not  covered  in  this  list,  the  days  and  dollars  may  be  trans- 
posed. If  the  new-created  amount  is  then  found  in  the  list,  the  rule  following 
same  may  be  applied  to  ascertain  the  interest. 

139 


911 


DOUBLE   ENTRY    BOOK-KEEPING. 

Whenever  this  transposition  is  made,  if  the  original  amount  consisted  of 
dollars  and  cents,  when  transposed  it  consists  of  days  and  hundredths  of  a 
day  ;  therefore,  in  such  cases,  whenever  a  rule  directs  you  to  add  two  ciphers, 
instead  of  doing  so  cast  out  the  decimal  point,  and  then  proceed  as  directed 
in  the  rule  ;  when  the  rule  directs  you  to  multiply,  cast  out  the  decimal  point 
and,  after  the  multiplication,  point  off  two  more  places  than  you  are  directed 
to  do. 

Examples  in  Transposition  of  Principal  and  Days  : 

$290  for  4  ds.,  transposed  gives  $4  for  290  ds.       29000  -h  3=9667  ;  29000+ 
9667=38667;  5  pi.  off  gives  .38667  or  39c,  Ans. 

$216.36  for  225  ds.,  transposed  gives  $225   for  216.36  ds.     21636-^4=5409; 
21636 — 5409  =  16227;  3  pi.  off  gives  16.227  or  $16.23,  Ans. 

$52.34  for  27  ds.,  transposed  gives  $27  for  52.34  ds.     5234x9  =  47106;   5  pi. 
off  gives  .47106  or  47c,  Ans. 


ON  PROVING  ADDITION  AND  SUBTRACTION. 

911.  Addition. — To  prove  addition,  proceed  as  follows:  (i)  Cast  out, 
or  pass  over,  all  9s,  and  all  combinations  of  figures  that  make  9,  18,  27,  or 
36.  When  all  the  figures  in  the  e.vample  have  been  passed  over  in  this  way, 
note  the  number  that  remains  after  the  last  9  has  been  cast  out.  (2)  In  the 
same  manner  cast  the  9s  out  of  the  sum,  or  total,  and  note  the  number 
that  remains.  (3)  If  the  remainder  in  the  example  and  the  remainder  in  the 
sum  agree,  the  addition  is  proved  correct. 


7266 
6492 
3584 
3765 


Beginning  at  the  top  line  in  the  < 
/«  the  Example. 
7694586 
26  2435 

6  3  7 

9      18        9        9        9      18       II 


ample  and  proceeding  downward- 
In  the  Sum, 
7        2 


2  remainder. 


Process  : 
ing  at  the  top  line  of  the  example  and  proceeding  downward — 
/ii  the  Example.  In  the  Sum. 

2  5  (left  from  6)  7  I 

S  5  2 


1  b)    10 


I  remainder. 
:,  .ilso  the  5  and  4  in  the  third  line,  are  "skipped 


DOUBLE    ENTRY    HOOK-KEEriNG. 

This  process  of  casting  out  9s  is  merely  one  of  addition  and  subtrac- 
tion. We  add  until  we  come  to  a  sum  that  is  divisible  by  9,  and  then  drop,  or 
cast  out,  this  sum,  when  we  begin  anciv  with  the  next  figure  —  and  so  on 
through  the  entire  example.  It  is  advisable  not  to  make  a  practice  of  adding 
beyond  36  or  45.  Better  progress  can  be  made  by  casting  out  the  smaller 
sums,  as  9s,  183,  and  27s.  Sometimes  it  is  convenient  to  "skip  around"  a 
little  in  order  to  make  up  these  divisible-by-9  sums.  When  a  sum  has  thus 
been  made  up  and  dropped,  we  go  back  and  pick  up  the  figure  or  figures  we 
skipped  over.  When  we  lack  only  i  of  having  enough  to  make  up  one  of 
these  divisible-by-9  sums,  it  is  well  to  borrow  i  from  the  next  figure,  drop 
the  sum,  and  go  on  with  the  remainder  to  make  up  another  sum.  When  we 
have  I  more  than  enough  to  make  one  of  these  divisible-by-9  sums,  we  drop 
the  sum  and  carry  i  to  the  next  figure. 

It  will  be  seen  that  in  this  process  no  regard  is  paid  to  the  position  of  the 
figures — whether  units,  tens,  hundreds,  or  tliousands  ;  but  each  figure  stands 
independently  of  tlie  other  and  is  picked  up,  and  thrown  away  regardless  of 
its  position  value. 

Great  care  must  be  taken  not  to  pass  over  any  9s  in  the  original  addition, 
for  such  errors  would  not  be  discovered  in  proving  by  this  process.  A  mis- 
take of  9  in  addition,  rarely,  if  ever,  occurs. 

There  is  no  person,  who,  after  thirty  minutes'  practice,  will  not  appreciate 
the  value  of  this  process  of  proving  addition.     (See  859.) 

912.  Sui!TK.-\CTlON.— To  prove  subtraction,  cast  out  all  9s,  first  from  the 
minuend,  and  note  the  number  that  remains;  then,  from  the  subtrahend  and 
remainder,  and  note  the  number  that  remains.  If  these  two  numbers,  or 
remainders,  agree,  the  subtraction  is  proved  correct. 


52S36 
365 '2 


Process: 
In  minuend.  It)  subtrahrnJ  and  remainder. 

56  3562 

2  .6134 

3  919  6 — remainder. 


This  method  can  be  used  to  the  greatest  advantage  in  the  Ledger,  when 
you  wish  to  prove  the  balance  of  an  account,  that  is,  the  amount  obtained  by 
subtracting  the  footing  of  the  lesser  side  from  that  of  the  greater. 

912a.  Multiplication. — To  prove  multiplication,  (i)  cast  the  9s  from 
the  viultiplicand  ^wA  note  the  remainder,  (2)  cast  the  9s  from  the  multiplier 
and  note  the  remainder,  (3)  multiply  the  above  remainders,  cast  out  the  9s  — 
and  set  down  the  remainder;  (4)  cast  the  9s  from  the  anszvcr  —  and  set  down 
the  remainder.     The  two  last-mentioned  remainders  must  agree. 

It  is  understood,  of  course,  that  this  process  of  proving  addition,  subtrac- 
tion, and  multiplication,  is  performed  mentally  —  the  only  figures  set  down 
being  the  jiiial  remainders. 

141 


913-9U 


DOUBLE   ENTRY    BOOK-KEEPING. 


913.  The  Balance  of  an  Account.— The  addition  of  both  the  debit 
and  the  credit  sides  of  an  account,  as  well  as  the  present  subtraction  of  one 
side  from  the  other,  can  be  proved  in  the  following  manner:  By  casting  out 
the  9s  on  the  lesser  side  from  the  old  footing,  from  the  new  amounts  entered 
since,  and  from  the  present  balance  —  noting  the  number  that  remains;  then, 
by  casting  out  the  9s  on  the  greater  side  from  the  old  footing  and  from  the 
new  amounts  entered  since — also  noting  the  number  that  remains.  If  these 
remainders  agree,  the  present  "balance"  is  proved  correct. 


Example 

Old  footing. 

New  items: 

Present  footing, 
Present  balance,  [. 
or  difference,    T^'S 

125  30 

III 
3  42 

137.25 

Old  footing,                                              60.25 

New  items:                                       5.10 

2.75 

Present  footing,                                    68.10 

Process: 

Greater  side. 
(Being  125.30,  7.25,  1.28  and 

1  2             3 

2  5              4 

32           — 

7             8            9-0  remainder. 

3-42.) 

(Bei 

Lesser  side. 
ng  60.25,  5- 10,  2.75— and  bal.  69.15.) 

5           7 
-1           I 

8          18 

5 
I^_o  remainder. 

There  is  no  book-keeper  who  cannot  well  afford  to  spend  an  hour  in  the 
practice  of  this  method  of  proving  addition  and  subtraction  ;  for  the  mastery 
of  a  system  by  which  these  results  may  so  easily  and  quickly  be  attained,  is, 
with  all  book-keepers,  "a  consummation  devoutly  to  be  wished." 


NAUGHT— 0. 


914.  Nearly  every  one  when  calling  off  an  amount  in  which  occurs  a 
cipher  in  the  tens  column,  calls  it  off  as  "aught"  when  he  ought  to  say 
"naught."  The  meaning  of  the  former  is  anything,  which  he  docs  not  mean  ; 
while  the  meaning  of  the  latter  is  nothing,  which  he  dees  mean.  Since 
"naught"  is  a  somewhat  difficult  word  to  pronounce  distinctly,  the  use  of  the 
letter  "O"  will  be  suggested  instead.  What  this  letter  loses  in  meaning 
when  Webster  is  consulted,  it  gains  in  suggcstivcness  when  its  shape  is  taken 
into  consideration.  Examples:  509.85.  Instead  of  saying  "  Five-naught- 
nine,  eighty-five,"  say  "Five-O-ninc,  eighty-five";  10.06,  "Tcn-naught-six," 
say  "Tcn-O-six." 


142 


915-910 

•;NTRV    liOOK-KEEPING. 


RF.VISIOXARY  ADDITIONS. 

915.     "Dr.  to"  in  Journal.— When  making  a  Journal  entry,  it  i.s  just 
as  well  to  omit  the  "Dr."  and  write  simply  "to"  between   the   account   to 
be  debited  and  the  account  to  be  credited.     Write  the  former  to  the  extreme 
left  and  the  latter  to  the  extreme  right,  placing  the  "to"  midway  between.  • 
(For  example  see  382.) 

016.  "To"  AND  "Bv"  IN  Cash  Book.— When  making  an  entry  on  the 
debit  side  of  the  Cash  Book,  the  word  "To",  usually  prefixed  to  the  account 
to  be  credited,  may  as  well  be  omitted,  since  it  is  universally  understood  that 
Cash  is  Dr.  to  this  account  ;  also,  when  making  an  entry  on  the  credit  side  of 
the  Cash  Book,  omit  the  word  "By",  which  is  usually  placed  before  the 
account  to  be  debited  to  indicate  that  Cash  is  credited  by  that  account. 
Both  these  words  are  superfluous. 

017.  Ahureviations. — The  following  abbreviations  arc  now  much  in 
use  when  making  Journal  and  Cash  Book  entries:  Sunds.  for  Sundries,  Bills 
Rec.  for  Bills  Receivable,  Bills  Pay.  for  Bills  Payable,  Int.  for  Interest,  Ins. 
for  Insurance,  Fr't  for  Freight,  M'f'g  for  Manufacturing,  etc.,  etc. 

018.  Ciphers,  Dashes.— When  an  amount  consisting  of  dollars  and  no 
cents  is  to  be  extended  into  an  amount  column,  it  is  a  saving  of  time  in 
writing  and  of  confusion  in  adding,  to  make  a  dash  in  the  cents  column 
instead  of  two  ciphers.  The  eye  can  pass  over  dashes  with  more  rapidity 
than  it  can  over  ciphers. 

Some  persons  omit  both  dash  and  ciphers,  leaving  the  column  blank. 
"On  a  pinch"  this  may  be  permissible  in  the  Ledger,  but  it  is  a  very  bad 
practice  to  adopt  in  any  other  book  because  of  the  liability  to  post  dollars 
as  cents. 

010.  Freight,  Cartage,  and  Express  Charges.— Freight,  cartage, 
and  express  charges  should  all  be  charged  to  Merchandise  ;  if  not  at  the 
time  such  are  paid,  they  should  be  so  charged  at  the  end  of  the  year,  by 
closing  these  accounts  and  transferring  the  net  amount  of  each  to  the  debit 
side  of  the  Merchandise  account.  The  reason  why  such  should  be  done,  is 
because  Merchandise  gets  credit  therefor  through  a  certain  percentage  added 
to  the  invoice-prices— the  cost-prices  being  marked  on  the  goods,  or  recorded 
in  the  price  books,  not  according  to  the  prices  given  on  the  invoices,  but  such, 
plus  the  freight  or  express  charges. 

Duty  and  custom-house  charges  on  imported  goods  should  also  be  charged 
to  the  Merchandise  account,  for  these,  of  course,  add  to  the  cost  of  the  goods, 
and  the  cost-prices  of  the  latter  are  advanced  accordingly. 

143 


920-922 

DOUBLE    ENTRY   BOOK-KEEPING. 

920.  Discount  Column.— If  a  great  many  of  our  bills  are  discounted, 
that  is,  if  we  allow  our  customers  a  discount  for  cash  on  goods  we  sell  them, 
and  they  pay  for  the  same  within  the  specified  time  allowed  for  such  dis- 
count, instead  of  making  the  entry  as  it  is  made  in  paragraphs  497  and  534 
in  this  book,  much  time  and  labor  may  be  saved  by  placing  a  "Discount 
Debit"  column  on  the  debit  side  of  the  Cash  Book  and  immediately  after  the 
column  in  which  are  extended  the  credits  to  customers.  Then,  whenever  a 
customer  deducts  a  certain  amount  from  a  bill  as  a  discount  for  cash,  and 
pays  the  remainder,  enter  the  full  amount  of  the  bill  in  the  "Miscellaneous," 
or  "Sundry,"  column,  and,  on  the  line  therewith,  extend  the  amount  of  the 
discount  into  the  "Dis.  Dr."  column.  At  the  end  of  the  month,  the  total  of 
this  latter  column  is  found  and  the  same  entered  on  the  opposite,  or  credit, 
side  of  the  Cash  Book,  as  so  much  having  been  paid  for  discount  and,  conse- 
quently, to  be  debited  to  the  Discount  account. 

921.  Discount  Debited  to  Merchandise.— The  Discount  account, 
when  such  is  kept,  should  be  closed  at  the  end  of  the  year  and  carried  into 
the  Merchandise  account.  Of  all  the  old  "established  customs,"  this  will 
probably  be  one  of  the  last  to  be  put  aside  for  reason  and  common  sense. 
For  many  years  yet  to  come,  the  "old  timers"  will  doubtless  continue  to 
argue  that  the  Discount  account  should  be  carried  directly  to  the  "Profit  and 
Loss  account"  instead  of  to  the  Merchandise  account — "just  because!''  The 
fact  is,  you  have  several  conditional  prices  for  your  goods,  that  is,  at  the  time 
you  sell  certain  goods,  you  virtually  name  several  prices,  and  then  leave  it  to 
your  customer  to  choose  which  of  these  he  will  accept  — your  condition  being, 
that  he  will  pay  for  the  goods  at  a  time  which  will  be  in  accordance  with 
the  price  given.  For  example:  Suppose  your  terms  are,  "",0,  '^jso,  ^jeo,  ^|oo. 
or  4  mos.  net;"  you  sell  a  certain  quantity  of  goods  the  four-months-net 
price  of  which  is  $ioo,  and,  since  you  cannot  know  at  the  time  the  goods  are 
sold  when  the  same  will  be  paid  for,  this  is  the  amount  for  which  you  credit 
Merchandise  —  supposing,  as  is  customary,  in  order  to  enter  some  amount  to 
the  credit  of  this  account,  that  the  four-months-net  price  will  be  chosen. 
Now,  by  writing  your  terms  upon  the  bill,  you  say,  in  effect:  "If  you  wait 
four  months  before  you  pay  for  these  goods,  my  price  for  them  will  then 
be  $100;  if  ninety  days,  $97;  if  sixty  days,  $96;  if  thirty  days,  $95  ;  and  if 
only  ten  days,  $94."  Here  are  given  five  different  conditional  prices.  This 
being  the  case,  whenever  a  bill  is  paid,  the  Merchandise  account  should  be 
adjusted  in  accordance  with  the  amount  actually  received  for  the  goods,  which 
adjustment  can  be  made  by  debiting  this  account  for  the  amount  of  the  dis- 
count deducted  from  the  four-months-net  price.  When  the  Merchandise 
account  is  not  debited  for  such  discounts,  it  shows  for  this  account  at  the  end 
of  the  year,  when  it  is  closed,  a  fictitious  and  incorrect  gain. 

922.  Cash  and  Discount  Posted  Separately.— In  some  houses,  the 
cash  and  discount  credits  are  posted  separately  instead  of  in  total,  but  this 
confuses  rather  than  makes  clear,  and  it  also  causes  just  twice  the  labor  in 

144 


DOUBLE   ENTRY   BOOK-KEEPING. 

posting.  When  a  customer's  bill  is  paid,  but  little,  if  any,  after-satisfaction 
can  be  derived  by  looking  at  his  account  and  learning  therefrom  that  we 
allowed  him  to  deduct,  when  such  was  paid,  a  discount  of  say  one,  two,  three, 
four,  or  five  per  cent.;  therefore,  it  is  always  the  better  way  to  credit  the 
person  in  one  amount  for  the  sum  of  both  cash  and  discount ;  then  )'ou  will 
save  the  making  of  an  e.xtra  entry,  and  show  clcarh',  in  the  amount  credited, 
which  bill  was  paid. 

923.  Bills  Receivable  and  Bills  Payable  Accounts.— A  new  mode 
of  treating  the  Bills  Receivable  and  Bills  Payable  accounts  will  be  described 
as  follows  :  Number  all  notes  received  and  given  in  the  order  in  which  they 
are  received  and  given  ;  keep  a  Bills  Receivable  and  Bills  Pa)'able  Book  ;  in  the 
left-hand  margin  of  this  book,  under  "No.,"  number  the  lines  consecutively. 

Bills  Receivable. — In  the  Bills  Receivable  part  of  this  book,  enter  the  notes 
in  the  order  in  which  they  are  received,  and  at  the  same  time  write  upon  each 
note  the  number  given  it  in  this  book.  After  the  note  has  been  fully  explained 
here,  this  e.xplanation  will  ever  after  suffice  ;  therefore,  instead  of  explaining  a 
note  after  a  Journal  entry  as  in  paragraph  373-374,  "Rec'd  his  note  at  90  ds. 
from  12-4-80;"  or,  in  the  explanation  column  in  the  Ledger  as  in  paragraph 
608,  "Bennett,  12-90,"  write,  both  after  the  Journal  entry  and  in  the  explana- 
tion column  of  the  Ledger,  simply  the  number  of  the  note,  thus:  "No.  7," 
Bennett's  being  the  seventh  note  in  the  Bills  Receivable  account.  Then,  if  at 
any  time  the  full  particulars  regarding  any  note  are  desired,  the  same  may  be 
learned  by  referring  to  its  number  in  the  Bills  Receivable  Book. 

Bills  Payable. — This  system  of  numbering  and  explaining  is  applied  to 
the  Bills  Payable  Book  and  Bills  Payable  account  in  the  same  manner  as  to 
the  Bills  Receivable  Book  and  Bills  Receivable"account. 

This  rule,  of  giving  simply  the  number  in  explanation,  applies  also  to  the 
Cash  Book  entries. 

When  this  method  is  adopted,  the  numbers  will  follow  in  regular  order  on 
the  debit  side  of  the  Bills  Receivable  account,  and  on  the  credit  side  of  the 
Bills  Payable  account;  therefore,  it  will  be  seen  that  in  this  arrangement  the 
finding  of  a  note  will  be  greatly  facilitated  while  checking  off  payments. 

If  a  distinction  is  desired  between  the  numbers  of  notes  received  and  notes 
given,  the  letter  "R"  may  follow  the  numbers  on  the  Bills  Receivable,  and 
the  letter  "P",  the  numbers  on  the  Bills  Payable;  or  any  other  private  mark 
will  answer  as  well. 

Part  Payments. — When  a  note  is  only  partly  paid,  write  after  the  number, 
"prt;"  when  the  balance  thereof  is  paid,  write  after  the  number,  "bal." 

Whenever  the  term  "note"  is  used  in  this  article  it  must  be  understood  to 
embrace  "acceptance,"  as  these  two  papers  are  the  same  in  effect.    (See  142.) 

924.  It  is  well  to  add,  in  the  explanation  column  on  a  person's  account, 
after  the  note-number,  the  date  the  note  fills  due  ;  as  this  is  a  more  satis- 
factory memorandum  than  would  be  one  of  simply  the  number  of  days  or 
months  the  note  had  to  run. 

145 


925 


DOUULE    ENTRY  l;OOK-Kt;EPING. 


925. 


COMPARATIVE   STATEMENT. 


1880               I88I       "        1882        '        1883 

1884 

ASSETS 

Personal  Accounts  owing  us 

Bills  Rec- Notes  on  hand 

Cash  on  hand 

Merchandise  (per  Inventory) 

Store  and  Office  Fixtures  (per  Inventory) 

Expense  -Coal  (per  Inventory) 

Un^oTTruTt'S^hares* 

3776 
"38 

=7 
500 

1663 

6854 

50 
50 

~w 

32 

1" 

"S 

50 

45 

45 

50 
70 

45 



= 

- 

Total  Assets 

LIABILITIES 

Bills  Pay.  — Notes  we  owe 

Present  Worth  „l  Firm 

8519 

_  GAINS 

Merchandise 
Interest 

'1 

791 

= 

- 

LOSSES 

Store  and  Office  Fixtures 

Freight  and  Express 
Salaries 

Collection  and  Exchange 

Advertising 

Lost  Accounts  and  Notes 

'11 
145 

16 

"43 

Net  Gaui  h,  Firm 

In  Balance  with  Total  Gains  (above) 

525 

°5 

791 

3" 
31 

18 

J.  H.  GOODWIN.  . 

One-half  Net  Business  Gain 
One-half  Net  Business  Loss 
Amount  drawn  for  Private  Use 

Present  Net  Worth— Night  of  Dec.  31st 

"33 

62 

7" 

357" 

-    .  S.  A.  EMERSON.  

One-half  Net  Business  Gain 
One-half  Net  Business  Loss 
Amount  drawn  for  Private  Use 

Net  Private  Gain 

"'present  NetVorth— Night  of  Dec.  31st 

"33 
3282 

SALES.  

February 

March 

April 

July 

August 

September 

October 

November 

December 

3043 



3043 

PROPORTION  OF  GAIN  TO  SALES. 
Of  Gross:  Cain  to  Sales 
Of  A>/  Gain  to  Sales 

25.8  per  cent 
8.76  per  cent 

146 


926-927 

DOUIiLE    ENTRV    riOOK- KEEPING. 

926.  This  is  an  age  of  statistics.  The  business  man  wishes  to  know  at 
the  end  of  each  year  not  only  the  present  condition  of  his  business,  but  also, 
at  the  same  time,  for  the  sake  of  comparison,  the  condition  of  his  business  at 
the  end  of  each  preceding  year.  When  a  statement  ilkistrating  the  same 
can  be  presented  in  a  compact  form  on  a  single  page,  it  will  be  found  of 
greater  interest  to  him  than  it  would  be  were  it  scattered  over  several  pages 
with  only  one  year  represented  on  each  page  ;  for  in  the  former  case  com- 
parison is  easy,  while  in  the  latter  it  is  difficult. 

The  form  illustrated  on  the  opposite  page  possesses  all  the  good  qualities 
of  the  forms  illustrated  in  paragraphs  812  to  817,  with  tli<-  adililion.il  advan- 
tages of  being  more  compact  and  more  complete.  Since  but  one  year's  busi- 
ness is  represented  in  this  book,  the  illustration  cannot  be  so  complete  and 
satisfactory  to  the  understanding  as  it  would  be  if  instead  several  years  were 
represented.  The  merits  of  this  form  cannot  fail  to  be  appreciated,  how- 
ever,  when  it  is  understood  that  the  statement  can  be  extended  in  width  for 
as  many  years  as  two  pages  will  accommodate  money-columns,  and  that  for 
as  many  years  the  condition  of  any  particular  branch  of  the  business,  or  class 
of  accounts,  can  be  compared,  one  year  with  another,  during  all  the  years 
the  firm  has  been  in  business.  The  making  of  this  statement  is  rendered 
very  easy,  too,  because  after  the  first  year  the  book-keeper  has  simply  to 
insert  the  amounts. 

The  sales  can  be  filled  in  from  month  to  month  during  the  year. 

A  few  extra  lines  should  be  left  under  the  Assets,  the  Gains,  and  the 
Losses,  in  case  new  accounts  should  be  opened  that  would  come  under  these 
headings. 

This  statement  may  be  divided  into  four,  when  the  firm's  Record  Book  is 
not  sufficiently  long  to  accommodate  it  on  one  page.  In  such  a  case  the 
Assets  and  Liabilities  would  be  placed  on  the  first  left-hand  or  even  page, 
the  Gains  and  Losses  next,  the  Partner's  Individual  Statements  next,  and  the 
Sales  and  Proportion  of  Gain  to  Sales  next — each  being  started  on  the  left- 
hand  page  and  extended  across  both  that  and  the  opposite  page. 


MINT  M.VRKS  ON  GOLD  AND  SILVER  COINS. 

927.  The  small  letter  found  immediately  over  the  denomination  on 
gold  and  silver  coins  of  the  United  States,  indicates  the  place  where  such 
were  minted,  or  coined.  All  coins  bearing  the  letter  C.  were  minted  at 
Charlotte,  N.  C. ;  C.  C,  at  Carson  City,  Nev. ;  D.,  at  Dahlonega,  Ga.  ;  O.,  at 
New  Orleans  ;  S.,  at  San  Francisco  :  no  letter,  at  Philadelphia.  The  Phila- 
delphia  mint,  which  is  the  oldest,  was  established  in  1792.  The  Charlotte 
and  Dahlonega  mints  ceased  to  exist  at  the  close  of  the  war  of  the  Rebellion. 

147 


928-933 

DOUBLE   ENTRY   BOOK-KEEPING. 


ON  ENDORSING  CHECKS  AND  DRAFTS. 

928.  There  are  still  a  few  business  men  who  have  yet  to  learn  that  by 
endorsing  either  a  check  or  a  draft  "in  blank"  they  make  it  payable  to 
bearer.  Such  a  man  goes  to  the  bank  and  buys  a  draft  for  the  purpose  of 
paying  an  Eastern  bill,  has  it  made  payable  to  his  own  order,  and  then 
endorses  it  "  in  blank  ;"  that  is,  by  writing  simply  his  name  across  the  back.  In 
this  condition  he  encloses  it  to  the  creditor,  and  then  goes  about  his  business 
in  blissful  ignorance  of  the  fact  that  he  might  as  well  have  enclosed  so  much 
currency.  Should  such  a  draft  be  lost  in  transit,  or  otherwise  go  astray,  it 
would  be  paid  to  the  person  presenting  it,  without  any  questions  as  to  how  he 
came  by  it,  or  regarding  the  name  of  the  person  from  whom  it  was  received. 
Or,  the  creditor  might  receive  it  and  pass  it  over  to  one  oi  his  creditors  with- 
out endorsing  it;  then,  were  he  a  dishonest  person,  he  could  disclaim  having 
received  it,  with  fair  assurance  that  the  contrary  could  never  be  proved. 

929.  Some  persons  when  buying  a  draft  to  send  away,  have  it  made  pay- 
able direct  to  the  order  of  the  creditor.  This  should  never  be  done,  for  the 
reason  that  when  produced  it  would  not  show,  either  upon  its  face  or  upon  its 
back,  that  it  had  been  passed  by  you  to  this  creditor.  Such  drafts  should 
always  be  made  payable  to  your  own  order,  and  then  endorsed  over  to  the 
person  you  wish  to  pay,  in  the  manner  described  in  the  following  paragraph: 

930.  The  proper  way  to  endorse  a  draft,  or  check,  when  we  wish  to  make 
it  payable  to  another,  is  to  write  on  the  back  of  same,  about  one-quarter  of 
the  way  down  from  the  upper  or  left-hand  end,  the  words  "  Pay  order  of," 
and  under  these,  the  name  of  the  person  to  whom  we  wish  to  send  it;  after 
which,  our  own  signature.  When  so  endorsed,  it  will  be  necessary  for  this 
person  to  himself  endorse  it  before  he  can  deposit  or  otherwise  make  use  of  it. 
Once  endorsed  by  him  it  constitutes  an  indirect  receipt  to  us,  for  this  paper 
when  produced  would  show  that  this  person  had  received  so  much  money 
from  us. 

931.  When  giving  a  check  to  another,  we  should  always  make  it  pa}able 
to  his  order  and  not  to  "bearer,"  for  when  payable  to  his  "order"  his  endorse- 
ment is  required  before  he  can  either  collect  the  money,  or  pass  the  check  to 
another  person.  After  such  endorsement,  when  returned  to  us  through  our 
bank,  this  check  constitutes  the  very  best  receipt  we  can  hold  against  the 
person  for  money  paid  him;  consequently,  whenever  we  wish  an  undeniable, 
unequivocal  receipt,  we  should  always  give  a  check  instead  of  paying  currency. 
Some  houses  give  checks  for  all  payments,  however  small  they  may  be. 

932.  Until  recently  nearly  all  checks  wore  printed  "  Pay or 

bearer,"  while  only   few   were  printed   "Pay or   order."     The 

reason  for  having  them  printed  "bearer"  was  to  guard  against  forgerj-,  for 
when  thus  printed,  the  giver  of  the  check  would  erase  with  his  pen  the  word 
"bearer"  and  write  over  it  the  word  "order."     If  the  check  were  printed 


148 


033-938 

DOUBLE    ENTRY   liCOK-KEEPING. 

"or  order,"  it  would  be  comparatively  easy  for  a  forger,  into  whose  hands  such 
might  fall,  to  erase  with  his  pen  the  word  "order"  and  imitate  the  handwriting 
closely  enough  to  substitute  the  word  "bearer."  Then,  if  the  imitation  proved 
good,  he  could  present  the  check  to  the  bank  and  collect  the  money. 

Nearly  all  checks  now  read,  "Pay  to  the  order  of ,"  and  this 

wording  is  never  changed.  If  a  person  wishes  to  make  such  a  check  payable 
to  bearer,  he  adds,  after  the  above  words,  "Cash." 

933.  Some  persons,  when  drawing  checks,  make  private  marks  across 
the  perforation.  Then,  when  such  checks  are  returned  from  the  bank  as 
vouchers,  they  compare  these  private  marks  on  the  checks  and  stubs.  If  the 
same  "match,"  the  genuineness  of  the  checks  is  not  further  questioned. 
However,  this  is  now  an  almost  obsolete  custom.  But,  when  one  desires  to 
continue  this  practice,  the  best  method  of  marking  is  as  follows:  First, 
across  the  perforation  between  the  stub  and  check,  and  near  the  top  thereof, 
draw  a  straight  line  as  a  guide-line;  then,  below  this,  at  varying  distances 
from  this  guide-line,  make,  across  the  perforation,  a  circle. 

934.  If  the  Teller  of  a  bank  should  pay  a  check  bearing  a  forged  signa- 
ture upon  its  face,  the  bank  would  have  to  sustain  the  loss  of  the  amount  paid. 

935.  Should  a  check  be  made  payable  to  a  certain  person,  and,  without 
endorsement,  fall  into  the  hands  of  another  person  of  the  same  name  and  be 
by  the  latter  presented  at  the  bank  and  collected,  the  bank,  although  the 
person  who  collected  the  check  had  been  duly  identified,  would  have  to  bear 
the  loss  of  the  amount  paid  and  credit  the  same  to  the  drawer  of  the  check. 

936.  It  is  well  to  remember  while  receiving  checks  from  executors  or 
trustees,  that  on  a  check  received  from  the  former,  the  signature  of  one 
executor  is  sufficient  to  bind  all ;  but,  when  such  is  received  from  the  latter, 
all  the  trustees  must  sign  it,  since  the  signatures  of  a  less  number  would  be 
insufficient  to  hold  all. 

937.  Everyone  should  note  this:  an  endorser  guarantees  the  genuineness 
of  not  only  the  signature  of  the  endorser  immediately  preceding  his  own,  but 
also  of  the  signatures  of  «// preceding  endorsers  —  and  his  liability  under  this 
guarantee  never  ceases. 

ON  POSTING  CREDITS  FOR  CITY  INVOICES. 

938.  Whenever  we  have  a  city  creditor  with  whom  we  settle  monthly, 
and  from  wjiom  we  receive  a  great  many  invoices  during  the  month,  it  is  a 
great  saving  of  time,  as  well  as  of  space  in  the  Ledger,  to  post  the  amounts 
of  the  invoices  in  total  instead  of  separately. 

When  posting  in  this  way,  we  first  write  in  the  date  column  in  the  Ledger 
the  date  of  the  last  invoice  ;  then,  in  the  explanation  column,  the  number  of 
invoices;  after  which,  in  the  folio  column,  the  page  of  the  Journal;  and 
finally,  in  the  amount  column,  the  sum  total  of  all  the  invoices.  For  example, 
see  paragraph  460:     Supposing  no  time  is  given  on  any  of  these  invoices, 

149 


939 


DOUBLE   ENTRY   BOOK-KEEPING. 

but  that  the  account  is  such  an  one  as  is  here  described  ;  instead  of  posting 
these  invoices  as  they  are  posted  in  paragraphs  768  to  774,  we  would  post 
thus — Dec.  29,  7  b,  65,  $73.69.  ("7  b"  is  an  abbreviation  of  7  bills.  Invoices 
are  commonly  called  bills,  because  the  latter  is  the  shorter  word.) 

When  this  creditor  renders  a  statement  of  our  account  at  the  end  of  the 
month,  we  compare  the  same  with  his  account  in  our  Ledger.  If  they  do  not 
agree  we  turn  to  the  page  in  the  Journal,  where  we  find  the  amounts  of  the 
invoices  entered  separately:  from  this  Journal-entry  we  check  the  items  on 
his  statement. 

This  method  applies  only  to  such  accounts  as  are  settled  monthly,  and 
not  to  invoices  upon  which  time  is  given. 


OBJECTIONS  TO  SINGLE  ENTRY. 

939.  The  chief  objection  to  Single  Entry  book-keeping  is  that  of  having 
no  proof  against  errors  and  omissions.  If  you  should  sell  goods  to  a  person 
on  account  and  omit  to  post  the  amount  of  the  sale  to  the  debit  of  the 
person's  account  in  the  Ledger,  that  sum  would  be  forever  lost — unless  the 
person  were  honest  enough  to  notify  you  of  the  omission  ;  or  if,  worse  still,  you 
should  post  the  amount  of  the  sale  to  the  wrong  side  o&  the  person's  account, 
that  is,  give  him  credit  when  you  should  have  debited  him,  your  loss  would 
be  just  twice  the  amount  of  the  sale  ;  or,  should  you  post  a  debit  of  dollars 
as  so  many  cents,  your  loss  would  be  that  number  of  dollars  less  as  many 
cents  ;  or,  if  you  should  send  a  remittance  to  a  creditor  and  omit  to  post  the 
amount  to  the  debit  of  the  person's  account,  the  latter  would  show  that  \-ou 
still  owed  this  amount  and  you  might  pay  it  again,  thereby  tempting  your 
creditor  to  say,  "So  much  in  !"  Such  errors  in  Single  Entry  would  never  be 
discovered  unless  you  accidentally  stumbled  over  them,  while  in  Double 
Entry  they  would  throw  the  books  out  of  balance  and  necessitate  an  imme- 
diate search  for  the  under-debit  or  over-credit,  as  the  case  might  be.  When 
such  errors  are  shown  to  exist  and  their  locations  subsequently  discovered, 
the  business  man  should  "thank  his  lucky  stars"  that  his  ss'stem  of  book- 
keeping is  not  Single  Entry — but  Double  Entry. 

Another  objection  to  Single  Entry  is  the  fact  of  its  being  an  incomplete 
record  of  business  transactions.  Double  Entry  book-keeping  gives  us  a 
detailed  record  of  all  our  transactions,  cash  and  credit,  and  consequently 
enables  us  to  possess  such  information  as  is  given  in  paragraphs  925  and  926. 
This  information  cannot  be  obtained  in  Single  Entry,  for  the  reason  that  no 
record  other  than  that  of  transactions  pertaining  to  personal  accounts  has 
been  kept. 

When  all  these  facts  are  known  to  a  business  man,  and  he  still  persists  in 
keeping  his  books  by  Single  Entry,  you  may  safely  come  to  the  conclusion  that 
his  real  reason  for  doing  so  is  because  he  does  not  understand  Double  Entry. 


940-942 

DOUBl.K  HNTRY  BOOK- KEEPING. 

THl'  BILL  BOOK. 

940.  In  the  same  manner  as  the  Cash  account  is  taken  out  of  the  Ledger 
and  put  into  a  Cash  Book,  may  the  Bills  Receivable  and  Bills  Payable  accounts 
be  taken  out  of  the  Ledger  and  put  into  a  Bills  Receivable  and  Bills  Payable 
Book — commonly  called  the  Bill  Book.  Disregarding  established  customs  and 
stereotyped,  old-fogy  phrases,  such  as,  "No,  I  want  all  my  accounts  to  show 
up  in  the  Ledger,  where  they  belong!"  or,  "We  have  always  done  this  way 
and  I  guess  we  will  not  make  a  change  now,"  business  men  of  the  present 
progressive  age  are  rapidly  doing  away  with  all  unnecessary  work,  of  what- 
soever kind.  Therefore,  since  the  Bills  Receivable  and  Bills  Payable  accounts 
c^  be  done  away  with  by  keeping  a  Bills  Receivable  and  Bills  Payable  book, 
and  entering  all  notes  received  and  given  directly  in  that  book  as  an  original 
book  of  entry,  this  method  will  here  be  e.xplained  :  A  book  of  the  common 
form  can  be  utilized  by  ruling  a  ledger-folio  column  to  the  left  of  the  "Maker" 
column  in  the  Bills  Receivable  part,  and  to  the  left  of  the  "To  Whom  Payable" 
column  in  the  Bills  Payable  part.  However,  should  the  form  illustrated  in  the 
back  of  this  work  be  preferred,  in  which  these  columns,  together  with  several 
other  advantageous  features,  are  given,  this  book  will  be  furnished  upon  appli- 

•  cation.    Number  the  lines  and  notes  consecutively,  same  as  in  paragraph  923. 

941.  Bills  Receivable. — When  a  note  is  received,  enter  it  at  once  in 
the  Bills  Receivable  part  as  a  Debit,  and  write  upon  the  note  its  number. 
Then  turn  to  the  person's  account  in  the  Ledger  and  give  him  credit  for  the 
note,  writing  in  the  explanation  column  of  the  Ledger  the  number  thereof. 
After  which,  turn  back  to  the  Bill  Book  and  indicate  in  the  "L.  ¥."  column 
the  page  of  the  Ledger  to  which  the  credit  was  posted.  Payments. — When  a 
payment  is  made  on  this  note,  enter  it  first  in  the  Cash  Book,  giving  the 
number  of  the  note  in  explanation  ;  then  post  the  payment  to  the  "Payment" 
column  in  the  Bills  Receivable  Book.  When  the  note  is  discounted  at  the 
bank,  treat  it  in  the  same  manner  as  if  it  were  paid.  Trial  Balance. — When 
the  trial-balance  is  made,  take  this  book  and  find  the  difference  between  the 
total  debits  and  the  total  credits  or  payments,  then  carry  that  difference  to 
the  debit  side  of  the  trial-balance.  This  difference  should  exactly  agree  with 
the  sum  total  of  the  notes  held  against  others. 

942.  Bills  Payable.— When  a  note  is  given,  enter  it  at  once  in  the  Bills 
Payable  part  as  a  Credit,  and  write  upon  the  note  the  number  given  it.  Then 
turn  to  the  person's  account  in  the  Ledger  and  debit  him  with  the  note, 
writing  in  the  explanation  column  simply  the  number  of  the  note.  After 
which,  indicate  in  the  "L.  F"."  column  of  the  Bills  Payable  Book  the  page  of 
the  Ledger  to  which  the  debit  was  posted.  Payments. — When  payments  are 
made,  enter  them  first  in  the  Cash  Book,  then  post  them  to  the  "Payment" 
column  in  the  Bills  Payable  Book.  Trial  Balance.— When  the  trial-balance 
is  taken,  find  the  difference  between  the  total  credits  and  the  total  debits,  or 
payments,  then  carry  that  difference  to  the  credit  side  of  the  trial-balance- 
This  difference  should  indicate  the  sum  total  of  the  notes  we  owe. 


943-947 

DOUBLE   ENTRY   BOOK-KEEPING. 


GOODS,  DISCOUNT;  NOTES.  INTEREST;  DRAFTS.  EXCHANGE. 

943.  When  your  cash  balance  will  permit,  take  advantage  of  all  discounts 
offered  for  cash  on  goods  bought,  for  by  so  doing  you  reduce  the  cost  of  the 
latter. 

944.  Hold  all  the  interest-bearing  notes  you  get  until  about  ten  or 
fifteen  days  before  due ;  then  discount  them  at  your  bank  and  take  credit  for 
the  accrued  interest.  When  you  do  this,  your  Interest  account  reports  a 
profit.  The  reason  for  not  holding  a  note  until  it  becomes  due,  is  that  the 
maker  of  same  would  not  regard  a  notice  from  you  of  its  falling  due  on  a 
certain  date  of  so  much  importance  as  he  would  such  a  notice  from  your 
banker.  When  his  note  is  held  by  the  bank,  and  a  notice  is  sent  to  him 
stating  the  date  upon  which  it  will  fall  due,  it  is  unnecessary  to  add:  If  your 
note  is  not  promptly  paid  on  the  day  above  mentioned,  it  will  go  to  protest. 
The  banker's  notary  is  not  slow  in  getting  to  work  after  the  little  card  "Bank 
Closed"  goes  up,  for  'tis  then  that  he  makes  all  his  charges  for  protest  fees! 

945.  When  your  banker  charges  exchange  on  the  drafts  you  buy  from 
him,  keep  out  of  your  deposits  all  checks  and  drafts  on  Eastern  banks.  When 
you  wish  to  make  a  payment  of  an  Eastern  bill  or  note,  endorse  over  to  the 
order  of  the  person  to  whom  you  wish  to  make  such  payment  out  of  such 
checks  and  drafts,  a  sum  sufficient  to  as  nearly  as  possible  cover  the  amount 
of  the  bill,  or  note.  Should  the  aggregate  of  these  endorsed  checks  and  drafts 
fall  short  of  the  amount  you  wish  to  send,  buy  a  draft,  or,  if  the  same  be  very 
small,  enclose  currency  and  stamps  for  the  difference.  Do  not  hold  such 
drafts  and  checks  too  long,  because  one  of  the  banks  upon  which  the  same 
were  drawn  might,  in  the  meantime,  become  insolvent.  In  such  a  case,  if  it 
could  be  proved  that  you  held  the  paper  beyond  a  reasonable  length  of  time, 
you  would  have  to  suffer  the  loss. 

946.  When  you  receive  many  checks  and  drafts  on  Eastern  banks,  it  is 
a  good  plan  to  open  an  account  with  some  bank  in  Chicago  or  New  York. 
When  you  do  this,  endorse  all  such  checks  and  drafts  over  to  the  Cashier  of 
this  bank,  and  forward  them  by  mail  to  be  placed  to  your  credit,  at  the  same 
time  requesting  him  to  send  you  a  check-book.  This  procured,  you  can  draw 
a  check  on  your  Eastern  bank  whenever  you  have  an  Eastern  bill  or  note 
to  pay. 

947.  New  York  City  is  America's  money-market ;  therefore,  a  draft  on 
New  York  is  at  par  in  any  city  or  town  in  the  Union.  However,  some  Western 
bankers,  in  order  that  they  may  swell  the  credit  sides  of  their  Collection  and 
Exchange  accounts,  would  have  their  customers  believe  the  contrary.  Chicago 
exchange  is  at  par  in  St.  Louis;  but  St.  Louis  exchange  is  not  at  par  in 
Chicago. 

152 


948-949 

DOUBLE   ENTRY    BOOK-KEEl'ING. 

CHECKING  SETTLEMENTS. 

948.  Whenever  a  payment  is  made  on  an  account,  or  a  settlement  is 
made  by  note,  which  payment  or  settlement  just  covers  the  sum  total  of 
several  bills,  it  is  advisable  to  turn  to  the  person's  account  in  the  Ledger  and 
check  the  items  covered  in  such  settlement.  This  facilitates  not  only  in 
showing  which  bills  are  still  unpaid,  but  also  in  locating  the  "difference" 
whenever  a  person's  account  in  our  Ledger  does  not  agree  with  our  account 
in  his  Ledger. 

When  we  wish  to  show  on  an  account  the  items  covered  in  each  settle- 
ment, the  following  method  may  be  adopted:  In  the  margin  of  the  column 
opposite  the  amount  of  the  first  settlement,  make  a  small  "a";  then,  on  the 
opposite  side  of  the  account,  to  the  extreme  left  of  each  item  covered  in  the 
settlement,  write  the  same  letter;  the  payment  and  the  items  covered  in  the 
next  settlement  mark  "b",  and  so  on  through  the  alphabet  until  a  settlement 
in  full  is  made,  and  the  account  balanced,  when  you  may  again  begin  with  "a." 
Another  method  is  as  follows:  Beginning  at  the  top  of  the  page  on  an 
account,  number  each  bill;  then,  whenever  payments  are  made,  write  in  the 
explanation  column,  on  the  line  therewith,  the  number  of  each  bill  included 
in  that  payment. 

Whenever  you  pay  several  bills  at  one  time,  and  have  each  of  them 
receipted;  it  is  well  to  summarize  upon  the  back  of  the  bill  of  latest  date,  as 
a  memorandum,  the  amounts  of  the  bills  included  in  that  settlement. 


MEMORANDA. 


949.  If  you  are  accustomed  to  making  memoranda  for  use  when  you  go 
*'down  street,"  "down  town,"  or  "up  town,"  instead  of  making  the  same  in  a 
book,  as  is  usually  done,  'tis  a  better  plan  to  make  them  on  separate  slips  of 
waste  paper  —  using  one  slip  for  each  place  you  wish  to  visit.  A  sheet  of 
note-paper  folded  twice  makes  three  slips  of  about  the  proper  size.  The 
memoranda  should  be  made  across  the  ends  of  same. 

An  envelope  properly  inscribed  should  be  kept  in  a  convenient  place  in 
which  to  enclose  these  slips  as  they  accumulate  from  time  to  time.  When 
you  get  ready  to  go  "down  town,"  take  these  slips  out  of  the  envelope, 
arrange  them  in  the  order  in  which  you  wish  to  make  your  calls,  and  put  a 
rubber  band  around  them.  As  you  conclude  the  calls  destroy  the  slips. 
When  one  word  is  sufficient  for  a  comprehensive  memorandum,  do  not  write 
two  or  more. 

When  you  wish  to  make  a  memorandum  of  the  date  of  the  purchase  of  an 
article,  for  the  purpose  of  ascertaining  at  any  future  time  how  long  you  have 
had  it,  or  of  knowing  how  long  it  has  lasted  —  as,  for  instance,  a  box  of  pens, 
a  bottle  of  ink,  a  book,  or  a  certain  quantity  of  note-heads  —  a  brief  vvav  of 
doing  so  is  thus:       986— for  September,  1S86. 

153 


950 

DOUBLE    ENTRY    BOOK-KEEPING. 

A  NEW  METHOD  OF  DETECTING  ERRORS  IN  TRIAL-BALANCES. 

950.  [i]  Instead  of  checking  in  the  Ledger  each  item  posted  therein, 
take  a  sheet  of  paper  and  rule  thereon  several  money-columns,  heading  the 
same  "Debit"  and  "Credit,"  alternately.  Then,  if  convenient,  have  an  assist- 
ant to  write  the  amounts  in  these  columns  as  you  call  them  off. 

[2]  Take  the  Ledger  and,  beginning  with  the  first  account,  go  through 
the  entire  book,  calling  off  therefrom  each  item  posted  therein  during  the 
last  month;  first,  call  the  items  on  the  debit  side  of  an  account,  and  then 
the  items  on  the  credit  side  —  calling  out  to  the  person  assisting  simply 
"Debit"  or  "Credit,"  as  the  case  may  be,  and  the  amount;  he,  at  the  same 
time,  writing  in  the  proper  money-column  the  amount  called  off. 

[3]  To  the  extreme  left  in  these  money-columns  let  the  assistant  occa- 
sionally write  the  Ledger  page  for  reference. 

[4]  After  all  the  items  posted  to  the  Ledger  in  the  last  month  have  been 
called  off  and  placed  in  these  money-columns,  take  the  balance  from  the 
Cash  Book  and  place  it  in  the  debit  money-column.  If  the  Bills  Receivable 
and  Bills  Payable  accounts  are  kept  in  a  separate  book,  according  to  the 
method  described  in  paragraphs  940  to  942,  take  the  balance  from  the  Bills 
Receivable  Book  and  place  it  in  the  debit  money-column,  then  the  balance 
from  the  Bills  Payable  Book  and  place  it  in  the  credit  money-column.  Take 
from  the  above-mentioned  books  the  balances  of  the  first  of  the  month  and 
place  them  in  the  money-columns  opposite  to  the   present  balances. 

[5]  Then  find  the  sum  total  of  all  the  Debit  money-columns,  also  the  sum 
total  of  all  the  Credit  money-columns. 

[6]  If  these  sums  to'tal  agree,  the  mistake  in  the  trial-balance  will  be 
found  in  the  Ledger:  in  the  addition  of  some  column;  or  in  the  subtraction 
of  one  side  from  the  other  on  some  account ;  or  else  in  the  carrying  forward 
of  the  balance  on  some  account  from  an  old  page  to  a  new  one. 

[7]   If  these  sums  total  do  not  agree,  find  the  difference  between  them. 

[8]  If  the  difference  thus  found  agrees  with  the  difference  in  the  trial- 
balance,  the  error  in  the  latter  will  be  found  in  the  books  from  which  the 
postings  were  made:  in  the  footing  of  some  column;  in  the  carrying  forward 
of  some  footing  from  the  bottom  of  one  page  to  the  top  of  the  next;  or,  in 
the  addition  of  some  "sundries"  entry  in  the  Journal. 

[9J  If  the  difference  thus  found  does  not  agree  with  the  difference  in  the 
trial-balance,  then,  either  some  item  has  been  overlooked  in  the  Ledger  while 
you  were  calling  off  therefrom  the  items  for  these  money-columns,  or  there 
has  been  a  mistake  in  posting — to  find  either  or  both  of  which  proceed  as  fol- 
lows: Take  the  Journal,  Cash  Book,  and  such  other  books  as  you  may  have 
posted  from,  and,  beginning  with  the  first  of  the  month,  have  the  assistant 
call  off  therefrom,  first,  all  the  Debit  items,  and  then  all  the  Credit  items  — 
calling  first,  the  page,  as  indicated  in  the  "L.  F."  column,  and  then  simply  the 
amount ;  while  you,  at  the  same  time,  find,  in  the  left-hand  margin  of  the  proper 
money-column,  the  page  nearest  the  one  he  calls  off  (see  "3"  above),  and  look 

154 


951 


DOUBLE   ENTRY   BOOK-KEEPIXG. 

near  thereto  for  the  amount.  When  the  latter  is  found,  check  it.  Proceed  in 
this  manner  with  all  the  items  in  all  the  books  from  which  postings  were  made. 
While  checking  in  this  way,  the  omissions,  if  any,  and  the  errors  in  posting 
will  be  found.  If  any  items  are  found  in  the  Ledger  which  were  overlooked 
when  you  were  calling  off  from  this  book,  they  should,  when  found,  be  placed 
in  these  money-columns.  When  errors  in  posting  are  found,  they  should  be 
corrected  first  in  the  Ledger  and  then  in  these  money-columns.  After  all 
such  corrections  have  been  made,  and  after  all  the  items  in  these  money- 
columns  have  been  checked,  the  sum  total  of  all  the  debit  columns  should 
exactly  agree  with  the  sum  total  of  all  the  credit  columns. 

[lo]  After  all  the  foregoing  tests  have  been  made,  should  the  trial-balance 
be  still  out  of  bakince,  the  error  will  be  found  in  the  Ledger:  in  the  omission 
of  some  account;  in  the  footing  of  some  column;  in  the  subtraction  of  one 
side  from  the  other  on  some  account;  or  in  the  carrying  forward  of  some 
balance  from  an  old  page  to  a  new  one. 

First  of  all,  of  course,  the  addition  of  the  trial-balance  should  be  verified. 

At  first,  this  method  of  checking  may  not  seem  practical,  because  of  the 
time  required  to  transfer  the  amounts  from  the  Ledger  to  these  money-columns; 
but,  upon  trial,  it  will  be  found  to  require  less  time  and  also  to  be  infinitely 
more  accurate  than  the  old  method.  With  this  method,  when  an  item  is  called 
off",  that  particular  amount  must  be  found  before  it  can  be  checked;  therefore, 
if  an  error  is  made  in  posting,  it  cannot  be  passed  over.  Under  the  old  method 
of  checking  in  the  Ledger,  it  is  no  exaggeration  to  say  that  there  is  no  book- 
keeper who  has  not,  in  his  experience,  several  times  passed  over  some  simple 
error  which  his  eye  seemed  to  have  cherished  a  passing  fondness  for  on  account 
of  his  familiarity  with  its  outline;  therefore,  it  is  not  so  often  for  a  quick,  as 
for  a  sure  way  of  finding  the  mistake  in  his  trial-balance  that  the  book-keeper 
sighs.  How  preposterous  are  the  pedantic  proclamations  of  one  or  two 
would-be  figure-wizards  who  claim  to  possess  rules  "by  which  a  book-keeper 
can,  at  once,  locate  the  errors  in  his  trial-balance  for  which  he  has  been 
seeking  weeks,  nay,  even  months  !"  Such  rules  do  not  exist,  and  it  is  unques- 
tionably safe  to  say  that  such  never  will  exist. 


DOLLARS  POSTED  AS  CENTS;  OR  CENTS.  AS  DOLLARS. 

951.  If  the  difference  in  the  Trial  Balance  be  a  sum  consisting  of  dollars 
and  cents  which,  when  added  together,  make  99,  cut  ofiT  the  cents,  add  i  to 
the  dollars,  and  this  sum  will  be  found  posted  as  dollars  where  it  should  have 
been  posted  as  cents,  or  vice  versa.  For  example:  $61.38.  61-^38  =  99; 
cutting  off  the  cents  and  adding  i  to  the  dollars  gives  62.  $62  will  be  found 
Dosted  as  62c.;  or,  62c.  as  $62. 

155 


DOUBLE   ENTRY   BOOK-KEEPING. 

TRANSPOSITION. 

952.  When  the  difference  in  the  Trial  Balance  is  72,  either  19  or  91  has 
been  transposed.  When  the  difference  is  63,  one  of  the  following  amounts 
has  been  transposed:  18,  81,  29,  or  92.  This  applies  as  well  when  any  number 
of  ciphers  are  affixed,  as,  for  example,  $7.20,  $72.00,  $720.00,  etc.  Further 
than  this,  to  know  that  the  difference  in  the  Trial  Balance  probably  consists 
of  a  transposition  of  figures  is  of  no  practical  benefit,  because  of  the  necessity 
for  carrying  so  many  figures  in  the  head  while  looking  for  the  error. 

In  order  to  prove  that  it  is  impossible  to  ascertain  from  the  figures  con- 
stituting the  error  exactly  what  figures  have  been  transposed,  it  is  only 
necessary  to  call  attention  to  the  fact  that  where  the  difference  is  9,  any  one 
of  the  following  sixteen  different  amounts  may  have  been  transposed,  viz.: 
12,  21,  23,  32,  34,  43.  45.  54-  56,  65,  67,  76,  7S,  87,  89,  and  98. 


PERPETUAL  PROOF  OF  LEDGER  BALANCE. 

953.  When  we  are  sure  that  on  the  books  from  which  postings  are  made, 
all  the  additions  and  carryings-forward  are  correct,  and  that  all  items  entered 
in  such  books  are  correctly  posted  to  the  Ledger,  we  know  positively  that 
the  latter  is  in  balance. 

By  doing  a  little  extra  work  while  posting,  the  book-keeper  can  have,  in 
the  adoption  of  the  following  described  method,  daily,  nay,  hourly  proof  of 
his  Ledger  Balance: 

954.  Ledger  Balance  Proof. — Get  a  small  book  about  4x12  inches, 
containing  two  money-columns  on  a  page,  and  label  it  "Ledger  Balance 
Proof"  For  the  purpose  of  abbreviation  throughout  this  article,  this  book 
will  be  called  the  "L.  B.  P."— meaning  the  Ledger  Balance  Proof 

955.  Journal. — Before  beginning  the  posting  of  a  page  in  the  Journal, 
write  at  the  top  of  the  two  columns  in  the  L.  B.  P.,  "J"  (for  Journal),  and  the 
page  from  which  you  are  about  to  post;  as,  for  example,  "J  63."  Place  this 
book,  the  L.  B.  P.,  at  the  right  of,  and  near  the  Ledger,  while  posting;  then, 
whenever  you  post  an  amount  from  the  Journal  to  the  debit  side  of  an  account 
in  the  Ledger,  transfer  that  amount  from  the  Ledger  into  the  left-hand  or 
debit  column  of  the  L.  B.  P.;  and,  whenever  you  post  an  amount  from  the 
Journal  to  the  credit  side  of  an  account  in  the  Ledger,  transfer  the  same 
from  the  Ledger  into  the  right-hand  or  credit  column  of  the  L.  B.  P. 

After  all  the  items  on  this  page  of  the  Journal  have  been  posted,  if  there 
are  "extra"  columns  on  the  debit  side,  take  the  amounts  brought  forward  at 
the  top  of  this  page,  in  such  columns,  from  the  amounts  carried  forward  to 
the  top  of  the  next  page,  and  place  the  differences  thus  found  in  the  debit 
column  of  the  L.  B.  P.  Then,  if  there  be  "extra"  columns  on  the  credit  side 
of  the  Journal,  take  the  amounts  brought  forward  at  the  top  of  M/.y  page,  in 
such  columns,  from  the  amounts  carried  forward  to  the  top  of  the  next  page, 
and  place  the  differences  thus  found  in  the  credit  column  of  the  L.  B.  P. 

156 


950—957 


DOUBLK   ENTRY   BOOK-KEEPING. 


Then,  add  the  columns  in  the  L.  B.  P.,  and  if  they  agree,  the  Ledger 
Balance  for  the  posting  of  this  page  is  proved.  If  they  do  not  agree,  there 
has  been  a  mistake  made,  to  find  which  proceed  as  follows :  First,  compare 
the  amounts  on  the  debit  side  of  the  Journal  with  the  amounts  in  the  debit 
column  of  the  L.  B.  P.,  then,  the  amounts  on  the  credit  side  of  the  Journal  with 
the  amounts  in  the  credit  column  of  the  L.  B.  P.;  second,  examine  the 
additions  of  all  "sundries"  entries  on  the  page;  third,  see  if  any  amount  is 
extended  into  an  "extra"  column  when  it  should  have  been  placed  in  the 
"general"  column;  fourth,  examine  the  additions  of  the  "extra"  columns  and 
then  see  whether  the  totals  thereof  have  been  correctly  carried  forward. 
Through  these  examinations  the  error,  or  errors,  will  be  discovered. 

Proceed  in  this  manner  throughout  the  month  and  you  will  have  positive 
assurance  at  the  completion  of  the  posting  of  each  page  that  no  mistakes 
have  been  made  as  far  as  your  Journal  is  concerned. 

956.     Illustration. — See  paragraphs  385  to  420.^  in  this  book. 

LEDGER   BALANCE   PROOF. 
J  63. 


10 

80 

16 

_ 

«90 

— 

190 

— 

ISO 

«50 

7 

35 

,89 

30 

55 

189 
3 

30  1 

.:§ 

i 

4 

7 

=3 

46 

"5 

85 

*♦ 

»9 

9 

89 

62 

4> 

86 

" 

40 

'^S  60 

40 

3= 

■9: 

Par.  4205^  Or.  »27i  88 

100 

"■ 

=47 

23 

"   385   •■    24  65 

,4 

60 

Par  .,«5^  Dr.  »575  96 

••  385    •■     ■  45 

574 

5" 

Proof, 

t.470 

17 

»"47o 

I4" 

Proof. 

957.  Cash  Book,  Debit  Side.— Before  beginning  the  posting  of  a  page 
on  the  debit  side  of  the  Cash  Book,  write  at  the  top  of  a  credit  column  in  the 
L.  B.  P.,  "C"  (for  Cash)  and  the  page  from  which  you  are  about  to  post;  as, 
for  example,  "C  90."  Then,  whenever  you  post  an  amount  from  the  debit 
side  of  the  Cash  Book  to  the  credit  side  of  the  Ledger,  transfer  that  amount 
from  tilt  Ledger  into  this  column  in  the  L.  B.  P. 

After  this  page  of  the  Cash  Book  has  been  filled,  and  all  items  in  the 
Miscellaneous  column  have  been  posted,  find  the  sum  total  of  this  Miscel- 
laneous column  and  deduct  therefrom  the  amount  brought  forward  at  the 
top  of  the  column,  if  there  be  any  such  amount;  then,  find  the  sum  total 
of  the  column  in  the  L.  B.  P.  If  the  latter  agrees  with  the  net  sum  of  the 
former,  both  the  addition  and  the  posting  are  proved  correct.  If  these  sums 
do  not  agree,  compare  the  amounts  in  the  two  columns. 


157 


958-961 

DOUBLE   ENTRY   BOOK-KEEPING. 

958.  The  End  of  the  Month. — At  the  end  of  the  month,  when  you  wish 
to  prove  the  correctness  of  all  carryings-forward  of  footings,  and  of  all  addi- 
tions of  "extra"  columns  on  the  debit  side  of  the  Cash  Book,  write  at  the  top 
of  a  debit  column  in  the  L.  B.  P.,  "C",  and  also  the  debit  pages  for  the  first 
and  the  last  of  the  month;  as,  for  example,  "C  76-90."  Then,  place  in  this 
column,  first,  the  balance  of  cash  on  hand  at  the  beginning  of  the  month  ; 
second,  the  totals  of  all  the  "C-ftwi-pages"  found  in  the  L.  B.  P.  for  the 
month,  as,  for  example,  the  totals  of  C  76,  C  78,  C  80,  etc.;  and  finally,  the 
totals  of  all  the  "extra"  columns  on  the  debit  side  of  the  Cash  Book.  After 
which,  find  the  sum  total  of  this  column  in  the  L.  B.  P.,  and  if  it  agrees  with 
the  sum  total  of  all  the  columns  on  the  debit  side  of  the  Cash  Book  at  the 
end  of  the  month,  the  correctness  of  the  work  done  thereon  and  therefrom  is 
proved. 

959.  Cash  Book,  Credit  Side. — Before  beginning  the  posting  of  a  page 
on  the  credit  side  of  the  Cash  Book,  write  at  the  top  of  a  debit  column  in  the 
L.  B.  P.,"C",  and  the  page  of  the  Cash  Book  ;  as,  for  example,  "C91."  Then, 
whenever  you  post  an  amount  from  the  credit  side  of  the  Cash  Book  to  the 
debit  side  of  the  Ledger,  transfer  that  amount  from  the  Ledger  into  this 
column  in  the  L.  B.  P. 

After  this  page  of  the  Cash  Book  has  been  filled,  and  all  items  extended 
into  the  Miscellaneous  column  have  been  posted,  find  the  sum  total  of  this 
Miscellaneous  column  and  deduct  therefrom  the  amount  brought  forward  at 
the  top  of  the  column,  if  there  be  any  such  amount ;  then,  find  the  sum  total 
of  the  column  in  the  L.  B.  P.  If  the  latter  agrees  with  the  net  sum  of  the 
former  the  correctness  of  the  work  is  proved. 

960.  The  End  of  the  Month.— Kt  the  end  of  the  month,  to  prove  the 
correctness  of  all  carryings-forward  of  footings,  and  of  all  additions  of 
"extra"  columns  on  the  credit  side  of  the  Cash  Book,  write  at  the  top  of  a 
credit  column  in  the  L.  B.  P.,  "C,"  and  also  the  credit  pages  for  the  first  and 
the  last  of  the  month;  as,  for  example,  "C  77-91  •"  Then  place  in  this 
column,  first,  the  footings  of  all  the  "C-o</^-pages"  found  in  the  L.  B.  P.  for 
the  month,  as.  for  example,  the  footings  of  C  77,  C  79,  C  81,  etc.;  then,  place 
in  this  column  the  footings  of  all  the  "extra"  columns  on  this  side  of  the 
Cash  Book.  After  which,  find  the  sum  total  of  this  column  in  the  L.  B.  P., 
and  if  the  same  agrees  with  the  sum  total  of  all  the  columns  on  the  credit 
side  of  the  Cash  Book  at  the  end  of  the  month,  the  correctness  of  the  work 
done  on,  and  from,  this  side  of  the  Cash  Book  is  proved. 

961.  Sales  Book. — When  posting  is  done  directly  from  the  Sales  Book 
to  the  Ledger,  in  order  to  prove  the  correctness  of  the  work  as  you  go  along, 
first,  place  at  the  top  of  a  m.oney-column  in  the  L.  B.  P.  the  footing  brought 
forward  from  the  page  of  the  Sales  Book  preceding  that  from  which  you  are 
about  to  post.  Then,  whenever  you  post  an  amount  from  this  book  to  the 
debit  side  of  the  Ledger,  transfer  that  amount  from  the  Ledger  into  this 
column  of  the  L.  B.  P. 

158 


962—963 

DOUm.E   ENTRY    BOOK-KEEPING. 

When  you  have  finished  the  postintj  of  ;i  p.v^c  in  the  Sales  Book,  draw  a 

line  under  the  last  item  in  the  L.   B.  P.,  and   find  the  sum  total  of  all  the 

entries,  including  the  amount  brought  forward  at  the  top  of  the  column.     If 

this  footing  agrees  with  the  footing  at  the  bottom  of  the  page  in  the  Sales 

Book,  the  latter  is  proved  correct;  as  is  also  the  posting  of  all  these  items 

from  the  Sales  Book  to  the  Ledger.     Directly  under  the  present  footing  in 

the  L.  B.  P.,  the  amounts  posted  from  the  next  page  are  placed  :  and  so  on, 

from  page  to  page,   throughout   the    month,  the   Salcs-Book-footings   and 

Ledger-postings  are  thus  proved. 

Example  : 

Footing  brought  forward  from  Sales  Book  page  55, 
Amount  posted  to  the  Ledger  from  Sales  Book  page  56, 


-J^^-^ 

^ 

5.380 

25 

263 

40 

'75 

90 

420 

55 

6,240 

10 

325  85 

60 

45 

Present  footing  in  the  L.  B.  P., 

Amount  posted  to  tlie  Ledger  from  Sales  Book  page  57, 

And  so  on. 

It  will  be  understood,  of  course,  that  no  writing  is  placed  upon  the  L.  B.  P. 
other  than  the  figures  of  postings  and  footings;  the  above  words  being  pre- 
fixed merely  for  the  purpose  of  explaining  the  method. 

Whenever  there  are  only  a  few  amounts  to  be  posted  from  each  page,  as 
in  the  above  example,  the  adding  of  the  column  in  the  L.  B.  P.  may  be 
deferred  until  two,  three,  or  several  pages  have  been  posted,  then  the  total 
ascertained  and  compared  with  the  footing  in  the  Sales  Book.  If  these  foot- 
ings do  not  agree,  an  error  has  been  made,  which  may  be  discovered  either 
by  comparing  the  amounts  in  the  L.  B.  P.  with  the  amounts  in  the  Sales 
Book ;  or  by  examining  the  footings  in  the  Sales  Book  and  the  L.  B.  P. 

The  postings  from  the  Miscellaneous  columns  in  the  Cash  Book  may  be 
proved  in  the  manner  above  described,  instead  of  in  the  manner  described  in 
paragraphs  957  to  960. 

9G2.  In  the  same  maimer  as  that  described  in  the  preceding  paragraphs 
the  correctness  of  the  work  done  on,  and  from,  any  other  book  from  which 
postings  are  made  can  be  proved. 

963.  Before  transferring  an  amount  from  the  Ledger  to  the  L.  B.  P., 
always  observe  upon  which  side  of  the  Ledger  it  appears,  and  then,  while 
pronouncing  the  word  "Debit"  or  "Credit,"  as  the  case  may  be,  transfer  the 
amount  to  the  corresponding  column  in  the  L.  B.  P.  If  it  appears  on  the  debit 
side  of  the  Ledger,  be  sure  you  place  it  in  the  debit  column  of  the  L.  B.  P.; 
if  on  the  credit  side,  in  the  credit  column. 

This  method  consists  of  keeping  an  account  of  the  work  done  as  you 
progress,  and  of  proving  its  correctness,  not  at  the  end  of  each  month,  but  in 
sections,  that  is,  from  page  to  page.  The  correctness  of  this  work  is  proved 
by  comparing  the  aggregate  of  the  work  which  was  to  be  done  with  the 
aggregate  of  the  work  now  done — the  former  results  being  found  in  the  books 
from  which  postings  were  made ;  and  the  latter,  in  the  L.  B.  P. 

159 


964—966 


DOUBLE   ENTRY   BOOK-KEEPING. 


964.  It  will  be  seen  that  we  cannot  have  this  daily,  or  sectional,  proof  of 
the  Ledger  Balance  without  doing  a  little  extra  work,  nor  can  any  system  be 
devised  by  means  of  which  these  results  can  be  acquired  without  extra  labor. 
The  book-keeper  whose  trial-balance  "always  comes  out  to  a  cent!",  or  who 
seldom  makes  any  other  than  a  certain  kind  of  mistake,  and  "always  knows 
just  where  to  find  the  same,"  will  probably  think  this  method  not  worthy 
even  of  consideration.  But  if,  on  the  contrary,  the  footings  of  his  trial- 
balance  rarely,  if  ever,  agree  the  first  time  trying,  and  he  is  frequently  obliged 
to  spend  three  or  four  days,  and  sometimes  as  many  weeks,  in  looking  for  the 
errors,  before  he  can  discover  them,  he  will  find  it  advisable  to,  at  least,  give 
this  method  a  trial. 

965.  By  Casting  out  gs.— Another  method  of  proving  the  Ledger 
Balance  can  be  adopted  in  the  casting  out  of  9s  in  the  manner  described  in 
paragraph  911  (which  see).  When  this  is  done,  instead  of  having  two  money 
columns  in  the  L.  B.  P.,  have  two  columns,  each  wide  enough  for  a  single 
figure  only,  then  proceed  in  exactly  the  same  manner  as  heretofore  described, 
with  this  exception  :  instead  of  transferring  the  several  amounts  from  the 
Ledger  to  money-columns  in  the  L.  B.  P.,  cast  out  the  9s  and  transfer  the 
several  remainders  to  these  single-figure  columns  in  the  L.  B.  P.;  and  finally, 
cast  the  9s  out  of  each  of  these  single- figure  columns.  If  the  remainders 
from  the  latter  agree,  the  correctness  of  the  work  is  proved — provided  no 
transpositions  have  been  made,  and  no  dollars  have  been  posted  as  cents. 

Example,  see  par.  385  to  420^  ;  or,  the  results  thereof  in  par.  956. 
LEDGER  BALANCE  PROOF  BY  CASTING  OUT  9s. 
J- 63. 


Instead  of  «    .080, 

~7 

7 

Instead  of  *     16  — 

"      •■       190  — , 

190  — 

"       •■       150  — . 

6 

ISO  — 

"    !'.      ^  '5' 

I 

•• 

3 

189  30 

"    ;;       =  55.' 

.;ii 

.','    !!       ^  ~ 

8 

3 

8 

46  =5 

••       •■            2  8s. 

2 

" 

64.9 

::  ■•:    A 

7 

'.'.        '. 

89  62 

14  60 

•'       ••           6  40. 

••        =47  23 

',',       ',',         ^^  "'• 

"       ••       'm  60! 

•'       "        571  5>. 

"    ••  r.47i  eiT" 

X. 

T 

Instead  of  »i470  64 

Instead  of  keeping  this  L.  B.  P.  book,  a  figuring-block  can  be  placed  at 
the  side  of  the  Ledger  while  posting,  and  either  a  horizontal  or  a  perpendic- 
ular line  drawn  through  the  center  thereof,  to  separate  debits  from  credits, 
after  which,  while  posting,  place  the  figures  in  a  horizontal  line,  or  in  several 
horizontal  lines,  and  not  in  a  perpendicular  column  under  each  other,  as  in 
the  example  above  shown  ;  thus,  for  example  : 

Debit.         o         I         6        6         I 


160 


066—967 

I)OUBI-K    KNTKY    BOOK-KEEPING. 

This  method  of  casting  out  9s,  requires  only  about  one-third  as  much 
extra  labor  as  is  required  in  the  other  of  writing  the  amounts;  and,  unless 
the  book-keeper  seldom  makes  mistakes  in  transposition,  or  in  posting  dollars 
as  cents,  is,  in  consequence  of  these  two  exceptions,  probably  of  proportion- 
ately less  value.  If,  on  the  contrary,  he  frequently  makes  errors  of  this  kind, 
the  other  method  had  better  be  adopted,  since  that  is  proof  against  errors  of 
all  kinds,  including  even  these. 

966.  Proof  Slips.— In  some  cases,  where  the  Ledgers  are  large  and 
cumbrous,  slips  of  paper  would  be  more  convenient  to  handle  than  books, 
and  in  such  cases  it  is  here  suggested  that  Proof  Slips  be  used  instead  of,  but 
in  the  same  manner  as,  the  book  described  in  paragraph  954.  The  proper 
size  for  these  slips  is  about  3x8  inches.  They  should  be  ruled  thus  :  a  heavy 
line  running  lengthwise,  or  perpendicularly,  through  the  center,  with  a  money- 
column  on  each  side  ;  then,  faint-lines  across  from  side  to  side,  or  horizontally, 
at  a  distance  of  three-sixteenths  of  an  inch  apart.  In  order  to  obtain  a  good, 
solid  surface  upon  which  to  write  the  figures,  these  slips  should  be  made  into 
pads.  These  pads  may  then  be  held  in  the  hand  while  posting,  and,  whenever 
an  amount  is  posted  to  the  Ledger,  this  amount  may  be  placed  upon  the 
Proof  Slip.  When  posting  from  the  Journal,  the  two  money-columns  on  this 
slip  are  known  as  debit  and  credit,  respectively;  but  when  posting  from  any 
other  book,  they  lose  this  identity  and  are  known  simply  as  money-columns 
—  both  columns  being  utilized  for  all  debits  or  all  credits,  as  the  case  may 
require  ;  as,  for  instance,  when  posting  from  the  Sales  Book,  whence  all  items 
are  posted  to  the  debit  side  of  the  Ledger,  or  when  posting  from  the  Miscel- 
laneous column  on  the  debit  side  of  the  Cash  Book,  whence  all  items  are 
posted  to  the  credit  side  of  tile  Ledger. 

967.  Ledger  Balance:  Ledger  Balances.— In  the  adoption  of  the 
method  described  in  the  preceding  paragraphs,  the  Ledger  balance  may  be 
proved ;  but  not  the  Ledger  balances.  That  is,  although  the  Ledger  is,  in  fact, 
proved  to  be  in  balance,  the  balances  —  ascertained  by  adding  both  sides  of 
each  account  in  the  Ledger,  and  then  subtracting  the  footing  of  the  lesser  side 
from  that  of  the  greater  —  may,  in  one  or  more  cases,  be  incorrect.  For 
instance,  suppose  a  mistake  of  ten  dollars  had  been  made  in  the  addition  of 
one  side  of  a  certain  account  in  the  Ledger  —  this  would  not  change  the  fact 
of  the  Ledger's  being  in  balance  ;  but  would,  in  consequence  of  this  error, 
throw  the  trial-balance  out  of  balance.  Then,  since  all  work  other  than  this 
of  addition  and  subtraction  on  the  Ledger  accounts  had  been  proved,  the 
book-keeper  would  know  that  in  his  "Ledger  Balances"  the  error  would  be 
found;  consequently  he  would  not  waste  time  in  seeking  for  it  elsewhere. 


161 


968—969 


DOUBLE    ENTRY    BOOK-KEEPING. 


POSTAL  NOTES. 

968.  Is  it  generally  understood  that  the  sending  of  a  Postal  Note 
through  the  mail  is  no  more  surety  against  loss  than  is  the  sending  of 
currency.'  It  would  seem  not,  from  the  fact  that  quite  a  large  percentage  of 
the  remittances  in  amounts  from  one  to  five  dollars  received  through  the 
mails  are  in  Postal  Notes.  Postal  Notes,  like  Treasury  and  National  Bank 
Notes,  are  payable  to  bearer.  No  record  is  made  in  the  post-office  of  the 
name  of  either  the  sender  or  the  person  to  whom  the  Postal  Note  is  to  be 
sent;  and,  "  If  lost  or  destroyed  no  duplicate  can  be  issued."  Postal  Notes  are 
intended  as  a  convenience  in  sending  sums  under  five  dollars  containing  odd 
cents  or  fractional  parts  of  a  dollar,  and  not  as  a  surety  against  loss.  There- 
fore, when  you  wish  to  send  through  the  mail  any  sum  under  five  dollars,  and 
are  not  particularly  anxious  regarding  its  delivery,  it  is  just  as  safe  to  send 
currency.  But  when  you  wish  to  have  its  safety  insured,  be  generous  with 
"Uncle  Sam"  and  hand  him  five  cents  instead  of  three,  when  he  will  give  you 
a  Money  Order  positively  insuring  you  against  loss. 


INTEREST  RATES  \. 

When  the  rate  per  cent. 


THE  DIFFERENT  STATES. 

;  not  specified  in  any  contract  the   legal 
rate  is  understood. 

In  the  following  tabular  statement,  the  States  marked  with  an  asterisk  (*) 
permit  an  unlimited  rate  per  cent,  if  it  is  agreed  upon  by  the  parties  in  writing : 


Alabama 

Arkansas 

Arizona 

California 

Colorado 

Connecticut 

Dakotas 

Delaware 

District  of  Columbia. 

Florida 

Georgia 

Idaho 

Illinois 

Indiana 

Kansas 


Kentucky 

Maine....'.].'! 

Maryland 

Massachusetts. 

Michigan 

Minnesota 

Mississippi.. . . 

Missouri 

Montana...    . 

Nebraska 

Nevada  .... 
New  Hamp'-hir 
New  Jeisey.  . . 
New  York  . .  . 
North  Carolina 


Ohio 

Oregon 

Pennsylvania . 
Rhode  Island. 
South  Carolini 
Tennessee.... 

Texas 

Utah  

Vermont 

Virginia 

Washington.. 
West  Virginia. 
Wisconsin...  . 
Wyoming 


In  California  interest  cannot  be  collected  on  open  accounts.  In  Arizona, 
California,  and  'Wisconsin  interest  may  be  compounded  when  agreed  upon  by 
the  parties  in  writing. 

Penalty  for  Usury.— In  Alabama,  District  of  Columbia.  Illinois,  Iowa, 
Mississippi,  Missouri,  Nebraska,  New  Jersey,  North  Carolina,  South  Carolina, 
Vermont,  and 'Wisconsin- -forfeiture  of  all  the  interest;  in  Idaho  and  New 
Hampshire— forfeiture  of  three  times  the  amount  of  the  interest;  in  Arkansas, 
Minnesota,  and  New  York—forfeiture  of  both  interest  and  principal. 
162 


970-973 

IV    BCOK-l<.i:iil'ING. 


ADVANCED  DOUBLl:  HXTRY  BOOK-KHHriXG. 

970.  Advanced  Double  Entry  Book-keeping  consists,  first,  in  posting 
direct  from  the  books  of  original  entry  to  the  Ledger  ;  and  second,  in  so 
classifying  our  business  transactions  by  the  use  of  special  books  and  extra 
columns  as  to  require  only  a  single  posting  for  each  of  the  transactions  apper- 
taining to  personal  accounts;  and,  as  far  as  possible,  only  a  single  monthly 
posting  for  the  aggregate  of  each  class  of  transactions  appertaining  to  other 
than  personal  accounts.  When  a  system  of  book-keeping  is  thus  organized, 
it  requires  but  little  extra  labor  over  the  simplest  system  of  Single  Entry, 
and  is,  at  the  same  time,  the  most  advanced  system  of  Double  Entry. 

971.  Sales.— ^y  keeping  a  Sales  Book  and  posting  directly  therefrom  to 
the  Ledger,  we  reduce  that  portion  of  our  book-keeping  to  Single  Entry — 
because  we  -simply  post  the  amounts  of  the  sales  recorded  therein  to  the 
debit  of  the  respective  personal  accounts,  and,  at  that  time,  post  no  credit 
whatever.  AH  such  amounts  are,  however,  extended  into  the  outer  column 
in  the  Sales  Book  and  the  footings  thereof  are  carried  forward  from  page  to 
page  until  the  end  of  the  month,  when  the  aggregate  of  all  the  amounts 
which  were  during  the  month  posted  to  the  debit  of  our  customers'  accounts, 
is  posted  direct  from  this  book  to  the  credit  of  the  Merchandise  account. 
By  thus  posting  a  credit  to  balance  all  the  debits,  we  transform  Single  Entry 
into  Double  Entry. 

972.  The  same  result  is  acquired  by  recording  the  sales  directly  in  the 
Journal  and  having  an  extra  or  "  Mdse.  Credit"  column  therein  in  which  to 
extend  the  amounts  of  such  sales.  When  this  is  done,  we  treat  that  column 
in  the  same  manner  as  the  outer  column  in  the  Sales  Book  is  treated.  (See 
\2\,  347.  470  <ind  590) 

973.  In  many  cases  the  itemized  recording  of  the  sales  in  the  Journal 
would  be  impracticable,  for  the  following  reasons:  in  some  of  the  largest 
houses  as  many  as  from  ten  to  twenty  entry-clerks  are  required,  and  for  each 
entry-clerk  two  Sales  Books  —  thereby  necessitating  the  use  of  books  exclu- 
sively for  sales  (see  853  Ii)\  in  smaller  houses  they  require  perhaps  only  one 
or  two  Sales  Books,  but  have  sufficient  work  on  them  to  keep  one  entry-clerk 
busy  all  the  time,  hence  the  sales  could  not  be  recorded  in  the  Journal,  which 
latter  book  is  always  in  use  by  the  book-keeper;  in  still  smaller  houses  where 
they  employ  a  book-keeper  but  no  entry-clerk,  and  the  sales  are  entered  by 
"nobody  in  particular  but  everybody  in  general",  a  Sales  Book  is  required  in 
order  that  the  book-keeper  may  preserve  a  uniform  style  of  penmanship  in 
the  book  to  which  is  usually  attached  more  respect,  the  Journal. 

Some  houses  prefer  having  their  sales  kept  in  a  separate  book  for  the 
simple  and  only  reason  that  they  do  not  wish  them  mixed  with  the  other 
transactions. 

163 


974-975 

DOUBLE   ENTRY   BOOK-KEEPING. 

974.  When  sales  are  recorded  in  a  Journal  in  the  manner  illustrated  in 
this  book,  the  total  of  each  sale  requires  to  be  written  twice  —  once  for  the 
debit  (see  370)  and  once  for  the  credit  (see  371);  when  the  sales  are  recorded 
in  a  Sales  Book,  the  amount  or  total  of  each  sale  is  written  only  once. 
Whether  the  time  saved  in  the  writing  of  such  amounts  twice  instead  of  once 
ftrould  more  than  compensate  for  the  time  lost  in  the  handling  of  two  or  more 
books  instead  of  one,  is  a  question  which  can  only  be  answered  after  the 
nature  of  the  transactions  that  arise  in  one's  own  particular  business  has  been 
considered. 

Where  the  miscellaneous  entries  are  frequent  and  the  sales  entries  few,  as 
in  the  set  illustrated  in  this  book,  it  is  advisable  to  record  the  sales  in  a 
Journal  ruled  with  a  special  column  for  "Sales"  or  "Mdse.  Cr.";  but  where 
the  contrary  is  the  case,  it  is  better  to  have  Sales  Books  in  which  to  record 
the  sales. 

975.  Invoices. — There  are  three  ways  of  reducing  the  entries  for  goods 
bought  on  account  to  Single  Entry,  namely: — 

a.  By  pasting  the  bills  in  an  Invoice  Book  and  posting  the  amounts 
direct  therefrom  to  the  credit  of  the  respective  personal  accounts.  When 
this  method  is  adopted,  great  care  should  be  exercised  in  the  preservation  of 
our  invoices,  because  they  in  themselves  then  constitute  the  original  entry. 
When  we  have  several  bills  from  a  certain  creditor,  they  are  first  arranged  in 
order  of  their  dates,  and  then,  in  the  same  order,  pasted  in  this  book.  The 
amounts  thereof  may  be  summarized  in  this  book  as  a  memorandum  and  the 
total  of  all  bills,  instead  of  the  amount  of  each  bill,  posted  to  the  person's 
credit.     (See  938.) 

b.  By  keeping  a  Purchase  Journal  in  which  to  enter,  daily  or  periodically, 
credits  for  goods  purchased, — writing  simply  the  names  of  the  creditors,  terms, 
dates,  and  amounts  of  the  invoices;  thence,  posting  such  amounts  direct  to 
the  credit  of  the  respective  creditors'  accounts.  In  some  of  the  largest 
houses  where  the  work  is  minutely  subdivided,  the  creditors'  accounts  are 
kept  in  a  special  book  called  the  Purchase  Ledger,  or  the  Credit  Ledger. 

c.  By  having  an  extra  or  "Mdse.  Debit"  column  in  the  Journal  in  which 
to  extend  the  totals  of  the  purchases,  and  posting  the  credits  for  such  pur- 
chases direct  therefrom  to  the  credit  of  the  account's  of  the  persons  from 
whom  the  goods  were  bought.     (See  12^,  342,  469  and  586.) 

In  any  one  of  these  ways,  only  a  single  posting  is  required  for  each  item  or 
bill  —  the  amount  thereof  being  extended  into  a  money-column  and  the  foot- 
ings of  the  latter  carried  forward  from  page  to  page  until  the  end  of  the 
month,  when  the  aggregate  of  all  the  credits  that  were  during  the  month 
posted  to  the  credit  of  our  creditors'  accounts  is  posted  to  the  debit  of  the 
Merchandise  account.  After  a  debit  has  thus  been  posted  to  offset  the  sum 
total  of  the  credits.  Double  Entry  is  evolved  out  of  what  was,  before  the  end 
of  the  month,  merely  Single  Entry. 

164 


»7«— 982 

DOUBLE   ENTRY    HOOK- KEEPING. 

976.  Goods  Returned.— \W\\cn  a  special  or  Credit  Book  is  kept  in  which  • 
to  enter  credits  for  goods  returned  to  us,  such  entries  are  reduced  to  Single 
Entry  —  because  wc  credit  our  customers  at  the  time  the  goods  are  returned, 
and  do  not  debit  Merchandise  until  the  end  of  the  month,  when  the  aggregate 
of  all  goods  returned  is  found  and  debited  to  the  Mdse.  account, —  thus 
making  it,  finally.  Double  Entry. 

977.  Cask. — Nearly  all  cash  transactions  are  reduced  to  Single  Entry 
by  keeping  a  Cash  Book  and  posting  direct  therefrom  to  the  Ledger.  The 
Cash  Book  is  not  only  the  cash  account  but  it  is  also  the  book  of  original 
entry, — being  at  once,  in  so  far  as  Cash  is  concerned,  both  the  beginning  and 
the  end  of  transactions. 

978.  When  cash  is  received  on  a  personal  account,  we  at  once  write  the 
person's  name,  together  with  the  amount  received,  on  the  debit  side  of  the 
Cash  Book:  this  act  "kills  two  birds  with  one  stone",  for  it  both  records  the 
transaction  and  debits  Cash.  Then,  Cash  being  debited,  all  we  have  to  do  is 
to  make  a  single  entry,  or  post  the  amount  to  the  person's  credit,  when  we 
have  Double  Entry, — Cash  debited  in  the  Cash  Book,  and  the  person  credited 
in  the  Ledger. 

979.  When  cash  is  received  on  other  than  personal  accounts,  we  can 
reduce  nearly  all  entries  for  such  to  a  single  monthly  posting  for  each  class 
of  transactions,  by  having  on  the  debit  side  of  the  Cash  Book  an  "extra" 
column  for  each,  as,  "Mdse.",  "  Interest",  etc. — :posting  therefrom,  at  the  end 
of  the  month,  to  the  credit  of  these  accounts  in  the  Ledger,  only  the  totals  of 
these  columns.     (See  476.) 

980.  When  cash  is  paid  on  a  personal  account,  we  at  once  write  the 
person's  name  and  the  amount  paid  on  the  credit  side  of  the  Cash  Book, 
which  act,  in  itself,  both  records  the  transaction  and  credits  Cash.  Then, 
Cash  being  credited,  all  that  remains  to  be  done,  in  order  to  have  the  posting 
complete,  is  simply  to  post  the  amount  to  the  person's  debit,  when  we  have 
Double  Entry — Cash  credited  in  the  Cash  Book,  and  the  person  debited  in 
the  Ledger. 

981.  When  cash  is  paid  on  other  than  personal  accounts,  ue  can  reduce 
nearly  all  entries  for  such  to  a  single  monthly  posting  for  each  class  of 
transactions,  by  having,  on  the  credit  side  of  the  Cash  Book,  representative 
columns  in  which  to  extend  such  amounts  as  are  to  be  charged  to  these 
accounts;  as,  "  Expense",  "Interest",  "Salaries",  etc.  At  the  end  of  the 
month  the  totals  of  such  columns  are  posted  to  the  debit  of  the  respective 
accounts  in  the  Ledger. 

982.  The  more  books  a  transaction  passes  through  before  it  reaches  the 
Ledger,  the  more  our  labor  is  increased, — the  fewer  books  it  jjasses  through, 
the  more  our  labor  is  diminished;  therefore,  in  order  to  accomplish  our  work 
with  as  little  writing  as  possible,  all  transactions  should  be  posted  direct  from 
the  book  of  original  entry  to  the  Ledger. 

165 


983—985 

DOUBLE   ENTRY   BOOK-KEEPING. 

No  one  should  fall  into  the  error  of  supposing,  however,  that  by  increas- 
ing the  number  of  our  books  we  necessarily  increase  our  labor,  or  that  by 
decreasing  the  same  we  necessarily  decrease  our  labor;  for  the  fact  is  nearly 
the  reverse  —  as  will  be  clearly  seen  in  the  saving  of  labor  which  is  effected 
by  adding:  a  Sales  Book  (see  971  and  974)  ;  a  Purchase  Journal  (see  975  b)  ; 
a  Cash  Book  (see  977  to  981)  ;  and  a  Bill  Book  (see  940  to  942)— posting 
from  each  direct  to  the  Ledger. 

983.  ''In  some  of  the  largest  houses  they  have  so  many  different  kinds 
of  books  that  they  cannot  find  appropriate  names  for  them  all.  In  such  cases 
they  generally  let  their  blank-book  maker  help  them  out  of  the  difficulty  by 
covering  each  nameless  book  with  cloth  of  a  different  color,  and  thereafter 
those  books  are  known  as  —  the  blue  book,  the  green  book,  the  black  book, 
the  red  book,  and  so  on. 

There  is  no  custom  in  naming  books  other  than  in  finding  names  as 
appropriate  as  possible  to  express  the  use  for  which  they  are  designed.  To 
show  that  in  this  particular  every  man  suits  his  own  fancy,  it  is  only 
necessary  to  add  that  in  a  certain  dry-goods  house  (one  of  the  largest  in 
the  world)  there  is  a  book  which  is  called  the  "Cold  Pig!"  This  book  is 
kept  for  the  purpose  of  indicating  when  a  part  or  the  whole  of  certain  goods 
which  were  sent  out  on  approval  have  been  returned,  as  well  as  the  shipping- 
number  and  the  book  and  folio  on  which  the  memorandum  charge  for  such 
goods  is  to  be  found.  Therefore,  when  you  read  about  a  certain  book  in 
this  work  and  then  look  in  your  office,  or  elsewhere,  for  a  book  bearing 
precisely  the  same  name,  do  not  be  discouraged  if  you  do  not  at  once  find 
it;  for,  as  "a  rose  by  any  other  name  would  smell  as  sweet,"  so  that  "Cold 
Pig"  would,  were  it  not  a  "Cold  Pig"  called,  serve  the  purpose  for  which  it 
was  designed,  under  any  other  title. 

984-.  If  our  book-keepers  would  only  employ  a  few  minutes  occasionally 
in  calculating  the  loss  and  gain  of  Time  which  would  accrue  through  the 
eliminating  of  work  whereby  losses  are  occasioned  and  the  pursuit  of 
methods  wherein  gains  are  made,  they  would  do  much  towards  placing  book- 
keeping on  a  still  higher  plane  of  excellence  than  that  upon  which  it  now 
stands;  for  it  is  through  such  "figuring"  only  that  the  science  is  advanced. 

985.  By  reducing  labor  we  lessen  the  liability  to  commit  errors.  We 
also  enhance  the  value  of  our  services  as  book-keepers,  for  we  accomplish 
more  work,  and  thereby  save  to  our  employers  the  salaries  of  additional 
book-keepers.  Moreover,  we  have  the  satisfaction  of  knowing  that  no  part 
of  our  time  is  wasted  in  doing  unnecessary  work. 

The  best  book-keeper  is  certainly  he  whose  work  can  be  neither  curtailed 
nor  simplified. 


166 


DOUBLE    KXTRY    BOOK-KEEPING. 

ADVANCED  BOOK-KEEPING  CONTRASTED  WITH  ANTIQUATED 
BOOK-KEEPING. 

986.  In  order  that  the  difference  between  the  advanced  style  of  book- 
keeping and  the  antiquated  style  may  be  more  readily  understood,  an 
example  illustrating  each  will  here  be  given  : 

Example:  We  receive  on  December  23d  from  G.  W.  Bennett  $32.19 
cash,  in  full  payment  of  his  account. 

ADVAN'CED   STYLE. 

(Copied  from  paragraphs  497  and  699  in  this  book.) 

In  the  Cash  Book: 

23,  44,  G.  W.  Bennett,  32. '9 

In  the  Ledger— Bennett's  Account  : 

23  go,    32.19 

ANTIQUATED   STYLE. 

(Copied  from  a  popular  business-college  text-book    published  less  than 
ten  years  ago.) 
In  the  Day  Book : 

Received  Cash  of  G.  W.  Bennett,  in  full  of  account,  32. '9 

In  the  Cash  Book  : 

23,  To  G.  W.  Bennett — Received  in  full  of  account,  3-- "9 

In  the  Journal  : 

41,  Cash  Dr.  32.19 

44  To  G.  W.  Bennett,  32-19 

In  the  Ledger— Cash  Account: 

23,  To  G.  W.  Bennett,  64,     32.19 

In  the  Ledger— Bennett's  Account: 

23,  By  Cash,  64,  32. 19 

In  the  former  style  there  are  only  twenty-five  letters  and  figures  —  in  the 
latter,  one  hundred  and  thirty-eight ;  consequently,  in  the  latter,  five  and  a 
half  times  as  much  writing  as  in  the  former;  therefore,  an  advanced  book- 
keeper of  the  present  time  can  accomplish  almost  as  much  in  a  day  as  a 
book-keeper  of  "y""  olden  time"  could  accomplish  in  a  week! 

Strange  to  say,  there  are  a  few  fossilized  ancients  who  still  cling  to 
the  old  method  of  journalizing  all  cash  transactions.  Well,  humor  their 
second-childishness  (if  you  can  afford  to  do  so),  for  they  are  in  the  seventh 
age  of  man  and  soon  will  have  passed  away. 


167 


987—988 


Book-Keeping  of  "A  i"  Houses. 


WHOLESALE. 


DEBITS. 

987.  Charge  Book-keepers.— In  some  of  the  largest  houses  where 
they  have  a  great  many  customers,  they  require  several  charge  book-keepers, 
or  book-keepers  whose  duty  it  is  to  keep  the  accounts  of  the  customers. 
Such  accounts  are  subdivided  alphabetically  according  to  the  names  of  the 
customers,  and  then  distributed  in  about  equal  proportions  among  the  said 
charge  book-keepers.  For  e.xample :  in  a  house  where  three  such  book- 
keepers are  required,  one  will  have  control  of  all  customers'  accounts  whose 
names  begin  with  any  letter  from  A  to  G,  inclusive;  another,  all  those  from 
H  to  N;  and  the  other,  all  those  from  O  to  Z.  Some  houses  have  only  two 
such  book-keepers,  while  others  require  as  many  as  ten  or  twelve,  according 
to  the  number  of  customers  they  have  and  sales  they  make. 

Throughout  this  article,  for  the  purpose  of  illustration,  it  will  be  supposed 
that  three  charge  book-keepers  are  required,  and,  that  the  business  is 
Dry-Goods. 

988.  Entry  and  Bill  Clerks.— The  duty  of  an  entry-clerk  is  to 
record  sales  in  a  Sales  Book,  while  that  of  a  bill-clerk,  whose  position  is  at 
the  same  desk,  and  by  the  side  of  the  entry-clerk,  is  to  make  out  bills.  These 
clerks  get  their  work  indirectly  from  the  salesmen,  and  directly  from  the 
call-clerk. 

When  a  sale  has  been  made  the  goods  are  collected  and  placed  upon  a 
table  in  front  of  the  entry-clerk.  The  call-clerk  then  gives  the  customer's 
name  and  address,  the  terms  upon  which  the  goods  were  sold,  and  the  sales- 
man's name;  after  which  he  calls  off  the  articles  and  the  prices.  While  he 
is  thus  calling  off,  the  entry-clerk  records  the  sale  in  the  Sales  Book,  and 
the  bill-clerk,  at  the  same  time,  makes  out  a  bill  on  a  bill-head.  These  clerks 
make  the  e.Ktensions  as  they  proceed,  and,  should  the  call-clerk  have  a  glib 
tongue,  there  are  but  few  entry  and  bill  clerks  who  will  not  claim  theirs  to  be 
the  hardest  work  of  any  in  the  house. 

After  all  the  items  have  been  called  off,  and  the  extensions  made,  the 
footings  of  the  latter  are  ascertained  —  on  the  Sales  Book  by  the  entry-clerk, 
and  on  the  bill  by  the  bill-clerk.  If  these  footings  agree,  all  the  extensions 
are  considered  correct;  should  they  not  agree,  the  extensions  are  compared 
and  the  error  corrected. 

1 68 


989-993 


DOU13LE   ENTRY   BOOK-KEEPING. 


989.  Department  Sales.— In  most  of  the  large  houses  they  wish  to 
know  the  profits  on  the  sales  of  the  different  classes  of  goods  handled.  In 
order  to  learn  this,  it  becomes  necessary  to  make  a  division  of  the  stock. 
Such  divisions  of  stock  are  then  known  as  "departments."  The  departments 
are  generally  designated  by  letters  instead  of  by  their  names;  as,  "A"  for 
Silks,  "B"  for  Laces,  "C"  for  Notions,  "D"  for  Dress  Goods,  etc.  The  reason 
for  doing  this,  is,  that  a  single  letter  can  be  much  more  quickly  written  than 
the  full  name  of  a  department,  and,  the  former  occupies  less  space  on  the  book. 

990.  "Sales  Ledger." — The  proper  name  for  the  book  in  which  is  kept 
the  accounts  of  our  customers,  is,  "Customers'  Ledger;"  but  since  this  is  a 
more  cumbrous  name  than  "Sales  Ledger,"  and  since  the  latter  is  as  appro- 
priate a  name  for  this  book  as  is  "  Purchase  Ledger"  for  our  creditors'  accounts, 
the  name  "Sales  Ledger"  will  be  used  throughout  this  work. 

POSTING   FROM   SALES   BOOKS. 

991.  There  are  a  few  houses  which  claim  that  it  is  impossible  to  post 
the  sales  direct  from  the  Sales  Books  to  the  Ledger,  and  have  at  the  same 
time  a  degree  of  proof  against  error  equal  to  that  which  could  be  obtained  by 
first  journalizing  and  then  posting  from  the  Journal.  This  is  an  erroneous 
idea,  for  where  proof  of  correctness  could  be  had  from  a  "go-between"  book, 
it  could  be  had  with  equal  if  not  more  absolute  certainty  from  the  original 
book  of  entry. 

992.  When  posting  is  done  directly  from  the  Sales  Books,  and  when 
there  is  more  than  one  Sales  Ledger,  in  order  to  prove  each  Sales  Ledger 
separately,  two  or  more  Sales  Books  are  required  for  each  Sales  Ledger.  In 
order  that  there  may  be  about  two  or  three  Sales  Books  in  the  entering- 
room  at  a  time,  and  two  or  three  in  the  hands  of  the  charge  book-keeper  to 
post  from,  it  is  better  to  have  four  or  five  Sales  Books  for  each  Sales  Ledger. 

993.  The  following  form  is  suggested  for  a  Sales  Book  from  which  the 
debits  to  customers  may  be  posted  direct  to  t}ie  Sales  Ledger,  and  the  credits 
to  departments  transferred  to  the  Department  Book:  ^ 

SALES  BOOK  —  No.  8?  —  H  to  N. 


To  Whom  Sold,  and  Articles. 


Brought  forward, 

7ao    i  Lord  &  Taylor,  Cily 

o  yds  Black  Silk 

o    ■•    Colored  Velvet 

o    "   Henrietta  Cloth 
Carried  forward. 


DEPARTMENT. 


-  A 

-  D 


t69 


991 996 

DOUBLE   ENTRY   BOOK-KEEPING. 

When  a  sale  has  been  made,  the  goods  from  the  several  departments  are 
kept  separate  as  they  are  placed  upon  the  table  before  an  entry-clerk.  The 
goods  from  each  department  are  then  called  off  separately  and  entered  in  the 
same  manner  in  one  of  the  Sales  Books  representing  the  Sales  Ledger  in 
which  is  kept  the  customer's  account.  The  amount  of  each  item  is  extended 
into  the  "Extensions"  column,  and  when  all  the  items  from  a  certain  depart- 
ment have  been  entered,  a  line  is  drawn  under  the  last  amount  in  this  column 
and  the  total  for  this  department  is  ascertained  and  extended  into  the 
"Department"  column,  preceded,  in  the  "Dep."  column,  by  the  representative 
department-letter.  Then,  the  items  from  another  department  are  entered  in 
the  same  manner,  and  so  on,  until  all  the  items  constituting  the  sale  have 
been  entered;  after  which,  a  line  is  drawn  under  the  last  amount  in  the 
"Department"  column,  the  amounts  therein  are  added  together,  and  the  total 
for  all  departments,  thus  found,  is  extended  into  the  "Charge"  column.  This 
latter  sum  must  agree  with  the  footing  of  the  bill. 

Thus,  the  departments  and  the  amounts  to  be  credited  thereto  are  shown 
in  the  "Department"  column,  and  the  amount  to  be  charged  to  the  customer 
is  shown  in  the  "Charge"  column. 

994.  The  amounts  in  the  "Department"  column  in  the  Sales  Books  are 
posted  to  their  respective  columns  in  the  Department  Book.  (This  book  will 
be  hereinafter  described.)  When  an  amount  has  been  posted  into  the  Depart- 
ment Book  a  "/"  is  made  in  the  "  Department"  column  of  the  Sales  Book  to 
indicate  that  fact. 

995.  The  amounts  extended  into  the  "  Charge  "  column  of  the  Sales  Book 
are  posted  direct  to  the  debit  of  the  customers'  accounts  in  the  Sales  Ledger, 
and  the  footing  of  this  column  is  carried  forward  from  page  to  page  until  the 
end  of  the  month.  At  the  end  of  the  month  the  aggregate  of  the  footings  of 
the  "Charge"  columns  in  the  several  Sales  Books  for  this  Sales  Ledger  (see 
992)  is  found,  and  this  must  agree  with  the  total  amount  of  sales  posted  to 
that  Ledger  during  the  month:  thus,  each  Sales  Ledger  is  proved  independ- 
ently of  the  others. 

The  aggregate  footings  of  the  "Charge"  columns  in  all  the  Sales  Books 
should  at  the  close  of  each  day,  as  well  as  at  the  end  of  each  month,  agree 
with  the  aggregate  footings  of  the  several  department-columns  in  the  Depart- 
ment Book. 

996.  Department  Book. — This  is  a  book  which  is  required,  when  the 
sales  are  not  journalized,  in  which  to  post,  from  the  Sales  Books,  the  credits 
to  departments ;  therefore,  it  takes  the  place  of,  and  is  of  the  saijie  form  as, 
the  credit  side  of  the  Sales  Journal.  (See  1003.)  At  the  end  of  each  day,  as 
well  as  ot  each  month,  the  footings  of  the  several  columns  in  the  Department 
Book  and  the  aggregate  thereof  are  found.  This  aggregate  must  agree  with 
the  aggregate  footings  of  the  "Charge"  columns  in  the  several  Sales  Books. 
At  the  end  of  the  month,  the  footing  of  each  column  in  the  Department  Book 
is  posted  to  the  credit  of  its  proper  account  in  the  Department  Ledger. 

170 


997-1000 

DOUBLE   ENTRY   BOOK-KEEPING. 

997.  Department  Ledger.  — This  book  is  what  its  title  indicates, 
namely,  one  in  which  are  kept  only  the  department  accounts  —  showing  in 
each,  the  purchases,  sales,  returns,  and  finally,  at  the  end  of  the  year,  the  net 
gain.  Each  account  is  debited  for  goods  bought  for  and  placed  in  its  depart- 
ment, and  credited  for  goods  taken  out  of,  or  sold  from,  the  same.    (See  1065.) 

998.  A  Sales  Book  for  each  Department.  — The  "Department" 
column  in  the  Sales  Book,  as  well  as  the  keeping  of  a  Department  Book,  is 
rendered  unnecessary  when  a  Sales  Book  is  kept  for  each  department,  because 
then  the  amount  to  be  credited  to  each  department  at  the  end  of  each  month 
is  shown  in  the  footing  of  the  "Charge"  column  in  its  representative  Sales 
Book,  and  this  footing  is  posted  direct  to  its  corresponding  account  in  the 
Department  Ledger.  When  two  Sales  Books  are  kept  in  each  department 
(for  alternation)  the  department-account  is  credited  from  these  books  for  the 
total  amount  of  sales  recorded  in  both  books  combined.     (See  853//.) 

SALES   JOURNALIZED. 

999.  In  many  of  the  large  houses  they  claim  that  for  various  reasons 
their  business  requires  the  journalizing  of  the  sales.  Some  of  these  reasons 
are  as  follows :  (i)  it  is  only  necessary  to  employ  as  many  entry  and  bill  clerks 
as  they  can  keep  constantly  at  work ;  (2)  when  goods  are  sold  to  a  customer 
from  several  departments,  they  may  be  collected  and  placed  upon  the  table 
before  any  entry-clerk  who  is  not  at  that  time  busy;  then,  the  goods  may  be 
called  off  and  entered  in  his  Sales  Book,  those  from  the  several  departments 
being  kept  together — thus  making  the  entry  complete  in  one  Sales  Book, 
instead  of  having  it  scattered  through  several-such  books,  as  it  would  be  were 
a  Sales  Book  kept  for  each  department  and  the  sales  from  same  recorded 
therein  —  as  in  the  preceding  paragraph;  (3)  a  complete  bill  can  be  made 
from  the  entry  in  this  Sales  Book,  while  if  the  sale  were  recorded  in  several 
.Sales  Books,  either  a  bill  would  have  to  be  made  in  each  department  for  tlie 
goods  sold  therefrom,  or  a  long  bill-head  passed  from  one  department  to 
another,  and  the  sales  from  each  added  thereto;  (4)  there  is  no  fixed  time  for 
passing  these  books  in  to  the  office  to  be  journalized,  two  books  being  required 
for  each  entry-clerk,  they  may  be  alternated  with  the  Journal-clerk  two  or 
three  times  a  day,  according  to  the  number  of  entries  made.  All  these  advan- 
tages are  acquired  in  the  method  described  in  991  to  997.  The  only  plausible 
excuse  for  journalizing  the  sales  is — Journals  are  more  convenient  for  refer- 
ence than  Sales  Books. 

1000.  Sales  Journal. — When  posting  is  7iot  done  directly  from  the 
Sales  Books  to  the  Sales  Ledgers,  but  the  sales  are  journalized  instead,  and 
when  a  separate  Sales  Book  is  not  kept  for  each  department,  a  Journal,  ruled 
with  an  extra  column  for  each  charge  book-keeper,  and  for  each  department, 
is  used.     A  form  for  this  Journal  is  illustrated  on  the  following  pages: 


1001—1002 


DOUBLE   ENTRY   BOOK-KEEPING. 


1001. 


LEFT-HAND   PAGE   OF   SALES  JOURNAL. 
Tuesday, 


- 

B- 

L.  F 

No.    |Pagc. 

84 

=65 

S.ua« 

48 

267 

Campbell 

3 '4 

268 

Lewis 

76 

271 

Pope 

265    1 

8S 

312 

Powell 

31= 

3-7 

Jordan 

426 

J2J 

Bailey 

315 

60  d. 


Arnold.Constable&Co 
Wanamaker,  John 
Lehmann.  E.  J. 
Houghton  &  Dutton 
Zion's  Co-op.  Mer.  In.  |  60  d. 
Crawford,  D.  &  Co.  " 

Ladd,  H.  W.  &  Co.       1  30  d. 


1002.  Sales  Journal,  Debit  Side.— On  the  debit  or  left-hand  side 
will  be  found  four  money-columns,  into  the  first  three  of  which  the  amounts 
to  be  posted  to  the  respective  Sales  Ledgers  are  placed  ;  into  the  last  column, 
the  aggregate  for  the  day  is  extended.  When  the  Journal  is  thus  ruled,  each 
charge  book-keeper  can  prove  his  work  independently  of  the  others,  because 
the  items  to  be  posted  to  his  Ledger  are  all  extended  into  a  special  column. 
Another  benefit  to  be  derived  from  having  the  Journal  thus  ruled,  is,  that 
each  book-keeper  is  not  obliged  to  look  carefully  over  all  the  names  in  order 
to  pick  out  such  as  belong  to  his  Ledger, —  as  is  the  case  when  there  is  only 
one  such  column  and  all  the  amounts  are  extended  therein;  the  Journal- 
clerk,  while  journalizing,  places  the  amounts  in  the  respective  columns  to 
which  they  belong,  and  then  all  that  each  charge  book-keeper  has  to  do,  is 
to  look  for  and  post  only  such  items  as  he  finds  extended  into  his  special 
column.  One  charge  book-keeper  posts  all  the  items  found  in  his  special 
column,  and  then  passes  the  Journal  to  the  next,  who  does  likewise.  In  this 
manner  it  is  passed  from  one  book-keeper  to  another,  until  all  the  items  in 
each  of  the  special  columns  have  been  posted. 

At  the  close  of  each  day's  business,  the  footings  of  the  charge  book- 
keepers' special  columns  are  found,  and  the  sum  total  thereof  (being  the  total 
sales  for  the  day)  is  extended  into  the  "Total"  column. 

The  left-hand  side  of  the  Sales  Journal  represents  the  debits  to  customers, 
while  the  right-hand  side  represents  the  credits  to  departments. 


172 


1003-1004 


DOUIU.E    ENTRY    BOOK-KKKPING. 
RIGHT-HAND    PAGE    OF   SALES   JOURNAL. 

Maj'  25,  1886. 


A 

^ 

c 

D 

E 

F 

G 

lotaL 

ll 

.20 

_ 

35 

6. 

"45  1  30 

'    84  !  so 

186 

45 

70 

63 

II 

240 

64 

,0 

114  »o- 

=85 

85 

118 

96 

li 

86 

35 

a  10   40 

140  80 

■95 

35 

J70 

30 

73 

20 

63 

.0 

.04  1  20 

3"   40 

307  90 

302 

50 

123 

70 

[ 

4i5 

80 

105 

45 

"73 

IS 

357   55 

430 

03 

216 

1" 

1 

317 

54 

55 

10 

85 

40 

.45   o« 

41a   70 

6.4 

35 

90 

as 

OS 

,« 

*>. 

i   " 

45 

16 

9^ 

90 

"' 

43 

7S30 

«8. 

58 

279 

940 

95 

{   ... 

1559 

35 

1896 

53 

646 

"'li 

100-t.  Sales  Journal,  Credit  Side.— When  the  sales  are  journalized 
they  are  entered  in  the  Sales  Books  promiscuously,  that  is,  without  regard  to 
the  recording  of  the  sales  for  certain  Sales  Ledgers  in  certain  Sales  Books,  as 
is  done  in  the  method  described  in  993. 

The  amounts  extended  into  the  "Charge"  column  in  the  Sales  Book, 
together  with  the  other  particulars  of  the  sales,  are  entered  on  the  opposite, 
or  debit,  side  of  the  Sales  Journal ;  while  the  amounts  extended  into  the 
"Department"  column  in  the  Sales  Book  are  entered  under  their  proper 
headings  on  this,  the  credit,  side  of  the  Sales  Journal. 

At  the  close  of  each  day's  business,  the  total  of  each  department-column 
in  the  Sales  Journal  is  ascertained,  and,  finally,  the  sum  total  of  the  footings 
of  all  the  department-columns.  This  latter  sum  is  then  extended  into  the 
outer,  or  "  Total,"  column.  Should  the  same  agree  with  the  amount  extended 
into  the  "Total"  column  on  the  debit  side,  all  the  footings  and  extcn'^ions  in 
this  book  are  proved  to  be  correct.  One  "Total"  column,  that  on  the  debit 
side,  will  answer  for  both  the  debit  and  the  credit  sides  — since  the  totals  of 
these  sides  must  agree. 

Owino-  to  limited  space,  this  form  and  the  succeeding  forms  admit  of  only 
seven  department-columns,  though  in  many  houses  from  twenty  to  forty  such 
columns  are  required  in  their  Sales  Journals,  because  they  have  from  twenty 
to  forty  departments. 

In  the  above  form,  the  department-letters  arc  printed  in  the  headings  of 
the  columns  instead  of  the  names  of  the  departments;  but  in  some  of  the 
succeeding  forms,  for  the  purpose  of  varied  illustration,  the  names  of  the 
departments  will  be  used,  for  these  are  thought  to  make  the  forms  more 
comprehensive. 


173 


1005—1007 

DOUBLE    ENTRY    BOOK-KEEPING. 

1005.  In  some  houses,  instead  of  having  only  one  Sales  Journal,  thej 
have  two  or  more  such  books,  and  distribute  the  entries  therein  in  abou) 
equal  proportions ;  that  is,  after  a  number  of  sales  have  been  journalized  in 
one  Journal,  this  book  is  handed  to  the  charge  book-keepers,  and  then  the 
journalizing  is  continued  in  another  Journal,  and  another,  and  so  on  until  all 
the  sales  have  been  journalized  and  all  the  Journals  passed  to  the  charge 
book-keepers.  This  is  for  the  purpose  of  obviating,  to  some  extent,  the 
necessity  of  one  book-keeper  waiting  for  another  to  complete  his  posting, 
before  he  can  get  the  Journal  from  which  to  post, —  as  is  the  case  where  only 
one  Sales  Journal  is  used. 

In  other  houses,  a  Sales  Journal  is  kept  for  each  Sales  Ledger. 

The  objection  to  this  method,  if  any  there  be,  is  the  scattering  of  the 
results  of  the  sales  in  the  several  departments  through  several  books,  instead 
of  having  them  in  a  compact  form  in  one  book.  By  thus  subdividing  the 
Journal  entries,  the  sales  from  the  several  departments  must  be  summarized 
in  a  "Summary"  Journal,  for  the  purpose  of  finding  the  respective  totals  of 
each  department  for  each  day. 

1006.  Abstract  of  Daily  Sales. — This  is  a  book  ruled  in  the  same 
manner  as  the  right-hand  page  of  the  Sales  Journal,  but  with  an  extra  column 
placed  at  the  left  of  the  department-columns  in  which  to  enter  the  date. 
Into  this  book  the  daily  totals  from  the  department-columns  of  the  Sales 
Journal  are  posted,  or  transferred.  This  serves  the  double  purpose  of  neces- 
sitating only  one  posting  per  month  to  each  of  the  department-accounts  in 
the  Department  Ledger,  and  of  being  a  convenient  book  for  reference  when 
the  members  of  the  firm  wish  to  compare  the  department  and  total  sales  of 
one  day  with  those  of  another.  The  following  is  an  illustration  of  the  form 
above  referred  to  —  the  same  being  understood,  of  course,  to  extend  in  length 
according  to  the  number  of  business  days  in  the  month: 

ABSTRACT   OF   DAILY   SALES. 
Afaj',  iSS6. 


!  o?.-s. 

Hosier.. 

Laces.     | 

Linens,     i 

1 

Woolens.       Total. 


roul  for  Month, ' 


1007.  At  the  close  of  each  month,  the  general  book-keeper  takes  this 
book  and  posts  therefrom  the  footings  of  the  several  department-columns  to 
the  credit  of  the  respective  department-accounts  in  the  Department  Ledger. 

174 


1008—1009 


DOUBLE    ENTRY    liOtJR-KEEPING. 


He  also,  at  the  same  time,  fills  out  the  line  for  the  corresponding  month  in 
the  form  following  this,  that  is,  in  the  Abstract  of  Monthly  Sales. 

100)S.  Abstract  of  Monthly  and  Yearly  Sales.— This  is  a  book 
kejrt  exclusively  for  the  gratification  of  the  members  of  the  firm.  One  or 
two  pages  are  reserved  either  in  the  fore  part  or  in  the  latter  part  of  this 
book  for  the  statement  of  yearly  sales,  and  the  remainder  is  used  for  the 
statements  of  monthly  sales.  The  portion  of  the  book  used  for  the  latter  is 
ruled  and  printed  as  follows: 


abstract  of  monthly  sales. 

1886. 


Months. 


February, 
March, 


June, 

July. 

August, 

September, 

October, 

November, 

December, 

Total  for  Ve; 


1009.     That  portion  of  the  book  which  is  reserved  for  the  statement  of 

yearly  sales,  is  ruled  and  printed  as  follows : 

ABSTRACT   OF   YEARLY  SALES. 


DeparCn 


Dress  Goods, 

Laces, 

Silks, 

White  Goods. 

Woolens, 


1886. 

.887. 

im. 

\\ 

175 


1010-IOU 

DOUBLE   ENTRY   BOOK-KEEPING. 

1010.  At  the  close  of  each  year's  business,  the  general  book-keeper 
finds  the  sum  total  of  each  of  the  different  department-columns  in  the 
Abstract  of  Monthly  Sales  and  transfers  the  several  totals  to  the  respective 
lines  to  which  they  belong  in  the  preceding-  form.  This  form  is  extended  in 
length,  of  course,  according  to  the  number  of  departments,  and  in  width  for 
as  many  years  as  the  page  will  accommodate  money-columns. 

1011.  A  great  many  book-keepers  do  not  wish  to  go  to  tlic  trouble  of 
gratifying  their  employers  by  making  for  them  the  foregoing  statements,  but 
whenever  they  do  exert  themselves  to  this  extent,  they  may  rest  assured 
that  in  a  large  majority  of  cases  their  efforts  will  be  appreciated,— and  some- 
times rewarded  by  an  increase  of  salary  ! 

ABSTRACT  SHEETS. 

1012.  Instead  of  posting  from  the  Sales  Books,  or  from  Sales  Journals, 
as  is  done  in  the  two  methods  described  in  the  foregoing  paragraphs,  there  is 
still  another  method  which  can  be  adopted.  This  may  be  described  as 
follows:  Each  department  has  a  separate  Sales  Book.  The  entry-clerk  is 
supplied  with  a  quantity  of  Abstract  Sheets.  These  sheets  are  ruled  and 
printed  to  order,  and  usually  contain  from  twenty  to  thirty  lines.  A  certain 
number  of  them  is  printed  for  each  Sales  Ledger;  as,  A  to  G,  H  to  X,  and 
O  to  Z.  The  dates,  and  usually  the  names  of  the  departments,  are  filled  in 
with  a  pen.    The  following  form  illustrates  the  use  of  a 

SALES   ABSTRACT   SHEET. 
A   TO   G. 

1013.  Dress  Goods  DEPARTMENT,  June  j,  i886. 

Sales  Book. 
No.     Pa?e. 


Salesman. 

L,  F. 

Name.                              Terms 

Amount. 

•        Total. 

1: 

Brought  Forward. 

3S4.'.sl| 

Mitchell 

76 

Daniels  &  Fisher, 

30  d. 

320 

40 

Morton 

285 

Bernei,  S  &  Son. 

60  d. 

160 

=5 

Glucklcr 

J40 

Brown,  Thomson  &  Co., 

■■ 

4-S 

50 

Vilanova 

=43 

Campbell  &  Dick, 

4n.. 

2.2 

35 

Chandler 

228 

Cook,  Taylot  &  Co., 

Carried  Forward, 

60  d. 

80 

.284      JO 

1014.     In  most  houses  where  this  method  is  adopted,  these  sheets  are 
filled  out  by  the  entry-clerks,  who  do  this  work  at  odd  moments  during  the 

176 


1014 

DOUULK    ENTRY    BOOK- KElil'ING. 

day,  and  finish  it  at  tlie  close  of  the  day's  business.  The  items  therefor  are, 
of  course,  taken  from  the  Sales  Books,  and  placed  on  the  respective  sheets  to 
which  they  belong.  'The  bill-clerks  sometimes  assist  the  entry-clerks  in 
making  up  these  Abstract  Sheets  by  taking  the  Sales  Books  and  calling  off 
therefrom  the  particulars  of  each  sale, — as,  page,  salesman,  customer's  name, 
terms,  and  amount. 

At  the  close  of  the  day  the  footing  of  the  ".Vmount"  column  on  each 
Abstract  Sheet  is  found  and  extended  into  the  "Total"  column.  This  footing 
is  then  added  to  the  amount  brought  forward  from  the  preceding  day,  and 
the  sum  thus  found  is  carried  forward  to  the  top  of  an  Abstract  Sheet  for  the 
beginning  of  the  ne.xt  day.  An  Abstract  Sheet  for  each  Sales  Ledger  is  then 
started  for  the  next  day  by  writing  at  the  top  of  the  sheet  the  name  of  the 
department,  the  date,  and  the  present  footing  of  the  total  column.  These 
sheets  for  the  day  just  past  are  then  handed  to  the  charge  book-keepers,  who 
post  therefrom  direct  to  the  debit  of  the  customers'  accounts  in  their 
respective  Sales  Ledgers. 

After  a  charge  book-keeper  has  posted  the  day's  Abstract  Sheets  from  all 
the  different  departments,  he  fastens  them  together  with  a  pin  or  paper- 
fastener  and  files  them  away,  thus  keeping  together  the  sheets  for  each  day's 
business.  He  requires  a  sheet  from  each  department,  whether  any  sales  have 
been  made  therefrom  or  not,  for  then  he  knows  that  no  sheets  are  missing, 
nor  sales  overlooked. 

The  posting  from  these  sheets  may  be  proved  in  the  same  manner  as  the 
posting  from  the  special  columns  in  the  Sales  Journal. 

The  total  footings  of  the  sales  in  each  department  are  brought  and  carried 
forward  on  these  Abstract  Sheets  from  day  to  day  and  from  sheet  to  sheet 
until  the  end  of  the  month,  when  the  final  totals  are  posted  from  the  last 
sheets  directly  to  the  credit  of  the  respective  department-accounts  in  the 
Department  Ledger.  The  footings  of  the  Sales  Books  are  in  each  depart- 
ment carried  forward  from  page  to  page  until  the  end  of  the  month.  The 
same  should  at  the  close  of  each  day  agree  with  the  aggregate  of  the  footings 
of  the  "Total"  columns  on  the  department's  Abstract  Sheets.  For  example: 
the  sales  ii\  the  Dress  Goods  department  up  to  the  night  of  June  3d,  1886, 
prove  as  f.;Ilows: 

Abstract  Sheets. 


No.  75,    $8822.60 
"  76,     6183.55 


15,006. 15 


.'\toG,  $5126.45 
H  to  N,  4514  50 
O  to  Z,     5365.20 

15,006.15 


This  not  only  proves  the  Abstract  Sheets  to  be  correct,  but  likewise  the 
additions  and  amounts  carried  forward  on  the  Sales  Books. 

Summaries  of  the  daily,  monthly,  and  yearly  sales  can  be  made  from  these 
Abstract  Sheets  as  readily  as  from  the  Sales  Journal,  and  the  same  forms 
answer  as  well  for  one  method  as  for  the  other.     (See  1006  to  loio.) 

177 


1015-1018 

DOUBLE   ENTRY   BOOK-KEEPING. 


THE   SALES-JOURNAL   SYSTEM   COMPAiyiD   WITH   THE 
ABSTRACT-SHEET    SYSTEM. 

1015.  The  Abstract  Sheets  take  the  place  of  the  special  columns  on  the 
debit  side  of  the  Sales  Journal,  by  means  of  a  set  of  department  sheets  for 
each  Sales  Ledger;  they  take  the  place  of  the  department  columns  on  the 
tredit  side  of  the  Sales  Journal,  by  means  of  a  set  of  Sales-Ledger  sheets  for 
each  department. 

1016.  For  the  Abstract  Sheet;  Against  the  Sales  Journal. — In  the  Sales- 
Journal  system  the  debits  to  customers  are  extended  into  special  columns 
for  the  several  charge  book-keepers,  and,  where  only  one  Sales  Journal  is 
used,  one  book-keeper  is  obliged  to  wait  until  the  others  complete  their 
posting  before  he  can  have  the  Journal  from  which  to  post  his  entries;  in  the 
Abstract-Sheet  system  each  book-keeper  has  his  entries  all  on  special  sheets 
of  his  own,  and  can  post  therefrom  at  his  convenience. 

1017.  For  the  Sales  yournal;  Against  the  Abstract  Sheet. — In  the  Sales- 
Journal  system  the  credits  to  departments  are  extended  into  special  columns 
kept  for  that  purpose,  while  in  the  Abstract-Sheet  system  the  credits  to 
departments  are  entered  on  special  sheets,  of  which  there  is  one  sheet  in  each 
department  for  each  Sales  Ledger. 

Whenever  a  sale  is  made  from  several  different  departments,  the  former 
system  has  an  advantage  over  the  latter,  inasmuch  as  in  the  Sales-Journal 
system  the  charge  to  the  customer  can  be  posted  complete,  in  one  amount, 
for  the  entire  sale ;  while  in  the  Abstract-Sheet  system  there  are  as  many 
different  charges  as  there  are  departments  from  which  the  goods  were  sold, 
and  such  charges  are  entered  on  separate  Abstract  Sheets, —  each  charge 
requiring  a  separate  posting  to  the  customer's  account. 

101 8.  For  the  A  bstract  Sheet;  Against  the  Sales  Journal.— The  Abstract- 
Sheet  system  possesses  an  advantage  over  the  Sales-Journal  system  inasmuch 
as  the  expense  of  a  Journal-clerk  required  in  the  latter,  is  avoided  by  requir- 
ing each  entry-clerk  to  make,  on  Abstract  Sheets,  a  daily  abstract  of  the  sales 
recorded  in  his  Sales  Book.  From  these  sheets  the  posting  is  done  direct  to 
the  Sales  Ledgers. 

It  is  quite  an  item  of  work  to  carry  forward  from  page  to  page  the  footings 
of  so  many  columns  in  the  Sales  Journal:  all  this  work  is  avoided  (by  the 
book-keeper)  through  the  use  of  Abstract  Sheets.  Further,  these  large, 
many-columned  Sales  Journals  are  very  expensive,  as  well  as  cumbrous  to 
handle  and  inconvenient  to  post  from ;  while  the  Abstract  Sheets  are  com- 
paratively inexpensive,  as  well  as  easy  to  handle  and  convenient  to  post  from. 

Some  houses  object  to  these  Abstract  Sheets  on  account  of  their  liability 
to  become  lost  or  misplaced,  but  in  such  cases  a  duplicate  can  easily  be  made 
from  the  Sales  Book. 

178 


1019-1021 

DOUBLE   ENTRY    BOOK-KEEl'ING. 


NEW   SALES   LEDGERS   EACH   YEAR. 

1019.  In  some  houses  they  open  new  Sales  Ledgers  at  the  beginning  of 
each  year.  When  they  do  this,  all  goods  sold  on  and  after  the  first  day  of 
the  new  year  are  posted  into  the  new  Ledgers,  and  all  payments  received  on 
old  accounts,  that  is,  for  goods  sold  before  the  first  day  of  the  new  year  are 
posted  into  the  old  Ledgers. 

Thus  it  will  bo  seen  that  the  accounts  in  the  old  Ledgers  are  allowed  to 
remain  open  until  they  are  balanced  by  payment,  or  otherwise  settled,  when 
they  are  ruled  off  and  closed  up.  In  this  way,  the  two  or  three  weeks'  loss 
of  time  occasioned  by  transferring  the  balances  from  an  old  Ledger  into  a 
new  one,  is  avoided. 

Some  book-keepers,  however,  object  to  this  plan,  because  of  the  necessity 
for  keeping  two  Ledgers  on  the  desk  at  a  time  ;  but  this  is  not  obviated  by 
transferring  the  balances  into  the  new  Ledger,  for  the  old  Ledger  is  required 
to  be  kept  on  the  desk  anyway,  because  it  must  be  referred  to  whenever 
payments  are  received  on  old  accounts,  in  order  to  learn  which  bills  are 
covered  by  such  payments. 


TRANSFER   JOURNAL. 

1020.  A  Transfer  Journal  is  sometimes  kept  (where  they  have  several 
Sales  Ledgers)  in  which  to  make  entries  for  the  correction  of  errors,  such  as 
the  posting  of  items  to  the  wrong  accounts,  or  in  the  wrong  Ledgers.  For 
example:  A  debit  is  posted  into  Ledger  O  to  Z  as  Henry  Wilson  &  Co., 
when  it  should  have  been  posted  into  Ledger  H  to  N  as  Henry,  Wilson  &  Co. 
An  entry  correcting  the  error  would  be  made  in  the  Transfer  Journal  thus: 

Henry,  Wilson  &  Co.— H  to  N. 

To  Henry  Wilson  &  Co.— O  to  Z. 

Book-keeper  H  to  N  posts  the  debit  to  the  former,  and  book-keeper  O  to  Z 
posts  the  credit  to  the  latter  — thus  transferring  the  entry  to  its  proper 
Ledger. 

INTEREST   CHARGES. 

1021.  All  debits  for  interest  on  past-due  accounts  are  usually  made 
through  the  General  Journal,  and  posted  therefrom  to  the  respective  Sales 
Ledgers.  The  credits  for  such  are,  of  course,  carried  to  the  Interest  account 
in  the  General,  or  Private,  Ledger.  In  this  latter  book  are  kept  all  accounts 
such  as  do  not  properly  belong  in  the  other  Ledgers,  as  Stock,  Interes*- 
Expense,  Loss  and  Gain,  etc.,  etc. 

179 


1022 


DOUBLE   ENTRY    BOOK-KEEPING. 


SALE   NUMBERS  AND   SHIPPING   CARDS. 

1022.  In  many  of  the  largest  houses,  in  order  to  facilitate  reference  an3 
save  writing,  they  number  each  sale,  beginning  the  numbers  anew  on  the  first 
of  each  year.  Where  this  is  done,  shipping-cards  numbered  in  consecutive 
order  are  used.     The  folio winir  is  the  form  of  a 


56395 


SHIPPING   CARD. 

Dec.  7, 


Uimc  or  UccorC"- 


■RecorOe&  bg- 


J.  W. 


NAME. 

Mandel  Bros. 

I 

1 

1    e    E 
I 

1 

ADDRESS. 

Chicago,  III. 

SALESMAN. 

Williams 

HOW  TO  PACK. 

Case 

■^ 

HOW  TO  MARK. 

<»> 

1 

HOW  TO  SHIP.  &c. 

B.  &  0.  R.  R. 

ANY  PACKAGES 
TO  COMt.    IN? 

D.  B.  Fisk  &  Co. 

Mail 

INITIALS  OF 
CREDIT  MAN. 

S.  E.  G. 

Read  in  by.  . 
Sales  Book,  N 
RecaUed   by. 

-  ?  =  1 

UUPLICATK. 

Their  City  Office^ 

mber 
mber 
s.ofr 

INSURANCE. 

Yes                          i^ 

Z    ^    ^ 

1    «       - 

1     UJ^     12  j^i    1      IM  1    2      8>i  1    3 

3J^  1    4      4« 

5 

5K  1   0 

(Back  of  above  Shipping  Card  turned  around  endwise — only  a  few  depart- 
ments, however,  being  here  given.) 

DEPARTMENTS. 


A 
B. 
C_ 
D_ 

V 

Silks  find  Vflvpts 

Ellison 

V 

Notions 

King- 

V 

McClunz: 

• 

1023 

DOUBLE   ENTRY   BOOK-KEEPING. 

1023.  The  figures  on  the  bottom  line  of  the  form  on  the  preceding  page 
represent  the  hours  and  half-hours  of  the  day.  They  are  inserted  merely  to 
save  the  credit-man  the  trouble  of  writing  them  when  this  card  passes  the 
credit-office. 

These  shipping-cards  are  filled  out  and  passed  from  one  employe  to 
another  in  the  following  manner:  (i)  by  the  salesman,  who  writes  thereon 
the  date,  terms,  name,  address,  salesman,  how  to  pack,  how  to  mark,  how  to 
ship ;  whether  any  packages  to  come  in  from  other  houses  to  be  enclosed 
with  the  goods;  whether  bill  is  to  be  sent  by  mail,  enclosed  with  goods,  rr 
held;  whether  a  duplicate  bill  is  to  be  made  for  any  other  office ;  whether 
goods  are  to  be  insured,  and  the  probable  amount  of  the  bill;  (2)  it  is  then 
passed  to  the  credit-man,  who  determines  whether  the  goods  may  be  shipped, 
and  who,  if  he  decides  in  favor  of  their  being  shipped,  writes  his  initials  on 
the  card  and  stamps  the  date  over  the  figure  representing  the  hour  at  which 
he  passes  the  card  (see  "Dec.  7,  1886," over  "12.^' in  preceding  form);  (3)  to  the 
shipping  department,  where  is  kept  by  the  shipping-clerk  a  Shipping  Book 
in  which  is  written,  in  the  left-hand  margin,  the  sale-numbers  — running,  of 
course,  in  consecutive  order;  the  shipping-clerk  then  writes  in  his  Shipping 
Book,  opposite  the  current  sale-number,  the  name,  address,  and  how  to  ship; 
'after  which  he  writes  on  the  card  the  corresponding  sale-number,  the  time  of 
record,  and  his  initials;  (4)  it  is  then  sent  to  the  respective  departments  from 
which  the  goods  are  ordered,  where,  as  the  stock-clerks  therein  collect  the 
goods  and  place  them  in  truck-baskets,  or  "rollers,"  (a  separate  basket  being 
used  for  those  from  each  department)  they  write  their  names  on  the  back  of 
the  card  on  the  lines  with  the  proper  department-letters;  thus  it  is  passed 
from  one  department  to  another  until  the  order  is  filled,  when  it  is  sent, 
together  with  the  baskets  containing  the  goods,  to  the  entering  department, 
where  the  manager  thereof  writes  the  time  when  it  and  the  goods  were 
received  from  the  last  department,  making  checks  after  the  letters  on  the 
back  of  the  card  as  the  baskets  are  received  from  the  respective  departments; 
(5)  to  the  first  call-clerk,  who  writes  on  it  the  exact  time  when  he  calls  off, 
or  "reads  in,"  to  the  entry-clerk;  (6)  to  the  second  call-clerk,  who  writes  on 
it  the  exact  time  when  he  rc-calls  to  the  entry-clerk  (in  some  houses  they 
have  one  clerk  to  call  off  and  another  one  to  re-call),  as  also  the  Sales-Book 
No.  and  folio ;  '7)  to  the  packer,  who  writes  on  it  his  name  and  the  exact  time 
when  the  goods  were  packed ;  also  the  number  of  parcels,  or  baskets,  as  the 
case  may  be ;  he  also  marks  on  the  case,  bale,  or  package  the  shipping  direc- 
tions and  the  sale-number,  for  it  is  through  this  latter  that  the  shipping-clerk 
can  readily  refer  to  the  entry  in  his  Shipping  Book  ;  (8)  and  finally,  to  the 
manager  of  the  entering  department,  who,  at  the  close  of  the  day,  arranges 
all  the  shipping-cards  in  their  proper  numerical  order,  and  then  files  them 
away  in  a  convenient  place  for  reference. 

This  shipping-card  is  thus  constituted  a  general  index  for  information  of 
any  kind  which  may  be  required  respecting  a  customer's  purchase,  since  it  is 
only  necessary  to  ascertain  the  sale-number  and  then  find   the  shipping-card 


1024-1025 

DOUBLE   ENTRY   BOOK-KEEPING. 

bearing  that  number  in  order  to  immediately  learn  the  lull  particulars  of  any 
sale.  The  shipping-cards  (as  aforesaid)  are  arranged  in  numerical  order  and 
then  placed  in  boxes,  each  of  which  contains  one  thousand  of  these  cards,  and 
upon  the  ends  of  which  are  placed  labels  indicating  the  particular  "thousand," 
as,  for  example,  "56,000." 

The  sale-number  — by  some  called  "register-number"  and  by  others 
"shipping-number"— is  copied  into  the  Sales  Journal,  and,  in  most  houses, 
posted  to  the  Ledger  instead  of  the  Journal  number  and  page.  This  number 
is  also  written  on  the  shipping  receipt  and  on  the  bill. 

SALESMAN'S   COMMISSION   BOOK. 

1024.  In  many  of  the  large  wholesale  houses  the  salesmen  are  paid  by  a 
commission  on  sales  instead  of  by  a  salary.  It  then  becomes  necessary  to 
keep  a  Salesman's  Commission  Book,  in  order  to  ascertain  how  much  is  to  be 
credited  to  each  salesman.  This  book  consists  exclusively  of  money-columns, 
at  the  top  of  which  the  names  of  the  salesmen  appear,  and  in  which,  under 
their  respective  names  (either  direct  from  the  Sales  Books  or  from  the  Sales 
Journals)  the  salesmen  are  credited  with  their  commissions.  At  the  end  of  the 
month  the  totals  of  these  columns  are  found,  and  then  each  salesman  is  cred- 
ited with  his  total  commissions.  The  accounts  of  the  salesmen  are  usually 
kept  in  the  General  Ledger,  but  sometimes  they  are  kept  in  a  special,  or 
Salesman's  Ledger. 

Some  houses  charge  the  aggregate  of  these  columns  in  the  Salesman's 
Commission  Book  to  Salaries  account ;  others,  to  Commission ;  while  others, 
again,  to  the  several  departments  — a  proportionate  percentage  being  debited 
to  each  department,  according  to  the  total  sales  made  therein. 

1025.  In  some  houses,  they  have  a  separate  Sales  Book  for  each  sales- 
man, and  record  the  sales  made  by  him  in  his  book.  When  this  is  done,  an 
extra  column  is  kept  in  this  book  in  which  to  extend  the  commissions.  In 
one  column  the  total  of  each  sale  is  extended,  and  in  another  (the  outside), 
the  commission  thereon.  The  footings  of  these  two  columns  are  carried 
forward  from  page  to  page  until  the  end  of  the  month,  when  the  final  totals 
sliow,  respectively,  the  total  sales  and  total  commissions  made  by  this 
salesman. 


102(j— 1029 

DOUBLE    KNTRV    BOOK-KEEPING. 

CREDITS. 

1026.  Posting  from  Individual  Cash  Books.- -In  some  houses,  sep- 
arate, or  individual,  Cash  Books  are  kept  for  each  charge  book-keeper. 
Then,  whenever  p;i)'mcnts  on  customers'  accounts  are  received  by  the  cashier, 
he  at  once  enters  them  in  the  respective  books  to  which  they  belong;  after 
which  he  hands  the  latter  to  the  charge  book-keepers,  who  post  therefrom 
direct  to  the  credit  of  the  customers'  accounts  in  their  respective  Sales 
Ledgers.  These  Cash  Books  are  lettered  to  correspond  with  the  lettering  on 
the  Sales  Ledgers.  For  e.\aini)lc:  where  three  charge  book-keepers  are 
employed,  there  would  be  three  of  these  Individual  Cash  Books, — one  lettered 
A  to  G;  another,  H  to  N,  and  the  other,  O  to  Z.  The  correctness  of  the 
postings  from  these  books  can  be  proved  in  the  manner  described  in  957. 

The  cashier,  at  the  close  of  each  day,  enters  in  his  General  Cash  Book 
merely  the  totals  from  each  of  the  Individual  Cash  Books,  indicating  so  much 
cash  having  been  received  by  him  for  credit  to  the  Sales-Ledger  accounts. 

1027.  Posting  from  the  General  Cash  Book. — Instead  of  keeping 
a  separate  Cash  Book  for  each  charge  book-keeper,  as  is  done  in  the  method 
described  in  the  preceding  paragraph,  a  special  column  may  be  ruled  on  the 
debit  side  of  the  General  Cash  Book  for  each  Sales  Ledger, —  in  the  same 
manner,  and  for  the  same  purpose,  as  the  special  columns  are  ruled  on  the 
debit  side  of  the  Sales  Journal.  (See  looi,  1002.)  Thus  it  will  be  seen  that 
while  the  amounts  extended  into  the  special  columns  on  the  debit  side  of  the 
Sales  Journal  are  posted  to  the  debit  side  of  the  customers'  accounts,  the 
items  found  in  the  special  columns  on  the  debit  side  of  the  Cash  Book  are 
posted  to  the  credit  side  of  these  accounts.  When  the  General  Cash  Book  is 
ruled  in  this  manner,  it  is  passed  from  one  charge  book-keeper  to  another, 
each  of  whom  posts  therefrom  the  entries  found  in  his  column. 

1028.  Sometimes  two  Cash  Books  are  kept  for  the  purpose  of  alternation 
—  after  the  manner  described  in  paragraph  853/!.  When  this  is  done,  the 
daily  totals  of  the  several  columns  therein  must  be  either  carried  forward 
from  one  book  to  the  other,  or  else  an  extra  Cash  Book  kept  in  which  to  post, 
at  the  close  of  each  day,  the  totals  of  the  amounts  extended  into  these 
columns  during  the  day. 

1029.  When  remittances  are  received  through  the  mail,  the  letters 
accompanying  them  are  first  assorted,  and  then  handed  to  the  charge  book- 
keepers, each  of  whom  turns  to  his  Ledger  and  checks  therein  thus,  "/",  all 
the  bills  covered  in  each  settlement;  after  which,  he  writes  on  the  letter  the 
dates  and  amounts  of  the  bills,  as  well  as  the  amount  of  the  discount,  when 
such  has  been  deducted  ;  then,  this  letter  is  handed  to  the  cashier,  who  enters 
the  particulars  in  his  Cash  Book.  When  this  credit  is  posted,  the  single 
check-marks  made  from  the  letter  are  crossed,  thus,  "X".  By  so  doing,  a 
credit  can  never  be  posted  to  the  wrong  account. 

183 


1030-1035 

DOUBLE   ENTRY   BOOK-KEEPING. 

One  object  in  doing  this  is  to  more  readily  ascertain  which  bills  are 
covered  in  the  settlement,  as  the  letter  usually  states  this;  another,  is  to 
learn  whether  the  discount,  if  such  has  been  deducted,  is  correct.  Sometimes 
the  customer  omits  to  mention  the  discount,  although  it  was  deducted  from 
the  bill;  in  such  a  case,  the  total  amount  to  be  credited  can  only  be  ascer- 
tained by  referring  to  his  account. 

When  payments  are  received  over  the  desk,  such  are  reported  to  the 
charge  book-keepers  on  cash  credit-slips,  and  these  are  by  them  treated  in 
the  same  manner  as  remittance  letters. 

1030.  Credits  for  Notes:  Posted  from  the  Bill  Book.— When 
the  method  described  in  paragraph  941  is  adopted,  credits  for  notes  received 
from  customers  are  posted  direct  from  the  Bills  Receivable  Book  to  the  cus- 
tomers' accounts. 

1031.  Since  the  entries  in  the  "Payment"  column  of  this  book  do  not 
follow  in  the  order  in  which  the  payments  are  received,  but,  instead  of  this, 
according  to  the  lines  upon  which  appear  their  respective  note-numbers;  and 
since,  in  consequence,  there  are  frequently  several  blank  lines  between  such 
entries,  to  be  filled  in  succeeding  months,  a  little  difficulty  is  experienced  in 
ascertaining,  at  the  end  of  each  month,  the  total  of  the  "Payment"  column. 
The  only  method  whereby  this  difficulty  may  be  obviated  is  the  keeping  of  a 
Bills  Receivable  account  in  the  Ledger,  and,  at  the  end  of  each  month, 
posting  to  the  debit  thereof  from  the  "Amount,"  or  "Debit,"  column  in  the 
Bills  Receivable  Book  the  total  of  the  notes  received  during  the  month,— 
and,  to  the  credit  thereof,  from  a  "Bills  Rec.  Cr."  column  on  the  debit  side  of 
the  Cash  Book,  the  total  of  the  payments  received  during  the  month. 

1032.  An  extra  "Bills  Rec.  Cr."  column  may  also  be  kept  on  the  credit 
side  of  the  page  in  the  General  Journal,  in  which  to  extend  credits  for  such 
entries  as  are  illustrated  in  paragraphs  418  and  422, — posting  the  total  of  this 
column  to  the  credit  of  the  Bills  Receivable  account  at  the  end  of  each  month. 

1033.  Credits  for  Notes:  Posted  from  the  General  Journal.— 
When  the  method  described  in  paragraph  941  is  not  adopted,  the  entries  for 
notes  received  must  be  made  in  the  General  Journal,  and  posted  therefrom 
to  the  debit  of  a  Bills  Receivable  accomit  and  to  the  credit  of  the  customers' 
accounts  —  as  in  paragraphs  447  to  449. 

1034.  Credits  for  Goods  Returned  and  Allowances.— A  Credit 
Book  is  kept  in  which  to  credit  customers  for  goods  returned,  and  for  allow- 
ances on  claims  of  "overcharge,"  "shortage,"  etc. 

1035.  Merchandise  Returned  Journal.  — In  connection  with  the 
Credit  Book,  there  is  kept  a  Merchandise  Returned  Journal,  in  which  is 
journalized,  from  the  Credit  Book,  the  debits  to  departments  and  credits  to 
customers  for  goods  returned.  In  reality,  this  Journal  should  be,  in  form, 
exactly  the  reverse  of  the  Sales  Journal,  that  is,  with  the  department  columns 

184 


1036-1038 

DOUBLE   ENTRY   BOOK-KEEPING. 

on  the  left-hand  page  and  the  columns  in  which  to  extend  the'  credits  to  cus-  ' 
tomcrs,  on  the  right-hand  page;  but  it  is  usually  of  the  same  form  as  the 
Sales  Journal.  The  credits  to  customers  are  posted  daily,  while  the  debits 
to  departments  are  posted  in  the  aggregate  at  the  end  of  the  month.  As  on 
the  Sales  Journal,  the  aggregate  footings  of  the  columns  on  the  left-hand 
page  must  agree  with  those  on  the  right-hand  page. 

1036.  PURCH.\.SE  Journal.— This  is  a  book  kept  in  which  to  record  the 
purchases  for  the  several  departments.  Sometimes  it  is  kept  by  the  general 
book-keeper,  and  sometimes,  in  a  house  where  the  purchases  arc  heavy  ard 
the  bills  numerous,  by  a  special  book-keeper.  In  the  latter  case,  a  Purchase 
Ledger  is  also  kept,  in  conjunction  therewith,  in  which  the  accounts  of  the 
firm's  creditors  appear.  Thus  it  will  be  seen  that  while  the  dutyof  a  charge 
book-keeper  is  to  keep  the  accounts  of  the  firm's  customers,  or  debtors,  the 
duty  of  the  credit  book-keeper  is  directly  the  opposite,  namely,  to  keep  the 
accounts  of  the  firm's  creditors.  Since  the  entries  for  the  latter  are  but  few 
in  comparison  with  those  for  the  former,  one  credit  book-keeper  is  usually 
sufficient  in  a  house  where  from  five  to  ten  charge  book-keepers  are  required. 

1037.  Purchase  Journal  tvith  Department  Columns. — A  book  of  special 
ruling,  similar  to  that  of  the  Sales  Journal,  may  be  used  for  the  Purchase  " 
Journal;  that  is,  by  having  a  special  column  for  each  department,  and  extend- 
ing the  purchases  therefor  into  the  respective  columns  to  which  they  belong. 
Then,  at  the  end  of  the  month,  in  order  to  learn  how  much  is  to  be  debited 
to  each  department,  it  is  only  necessary  to  find  the  footings  of  these  special 
department-columns  in  the  Purchase  Journal. 

1038.  Sectional  Division  of  Purchase  Journal.  —  When  the  Purchase 
Journal  is  not  specially  ruled,  as  referred  to  in  the  preceding  paragraph,  a 
book  of  the  common  form  of  journal-ruling  may  be  divided  off  into  sections, 
and  a  certain  number  of  pages  be  allotted  to  each  department.  When  this 
is  done,  only  one  posting  per  month  is  required  for  each  department,  because 
each  section  represents  a  department.  When  entering  bills  from  creditors 
under  any  one  of  the  several  departments,  the  credit  book-keeper  writes, 
first,  the  creditor's  name,  then  the  terms,  then  the  date,  and  finally,  he 
extends  the  amount  of  the  bill  into  the  outer  column ;  if  there  are  several 
bills  from  the  same  firm,  all  belonging  to  this  department,  he  places  the 
amount  of  each  bill  in  the  inner  column,  and  extends  the  sum  total  of  all 
the  bills  into  the  outer  column.  If  these  are  city  bills,  and  payable  monthly, 
the  sum  total  of  same  may  be  posted  to  the  credit  of  the  person,  instead  of 
taking  a  line  in  the  Ledger  for  each  bill  and  posting  separately.     (See  938.) 

The  credits  are  posted  as  they  are  entered  in  this  book,  but  the  debits  are 
not  posted  until  the  end  of  the  month,  when  the  sum  total  of  each  of  the 
outer  columns  in  the  different  sections,  or  departments,  is  found  and  posted 
to  the  debit  of  the  department-accounts  in  the  Department  Ledger 

1S5 


1039-1042 

DOUBLE   ENTRY   BOOK-KEEPING. 


INVOICE    NUMBERS. 


1039.  It  is  now  the  almost  universal  custom,  where  frequent  reference  is 
required,  to  number  each  bill  as  it  is  entered;  then,  when  posting,  to  insert 
the  invoice-number  instead  of  the  Purchase-Journal  folio.  Any  particular 
bill  may  then  be  more  quickly  found  than  it  could  be  by  any  other  method  of 
reference,  for  it  is  arranged  in  its  numerical  order,  and  all  memoranda  con- 
cerning it  bear  this  number.  The  invoice-numbers  begin  anew  with  the  first 
of  each  year. 

STOCK   BOOKS. 

1040.  A  Stock  Book  is  kept  in  each  department.  One  object  in  keeping 
such  a  book  is  to  know  when  new  stock  should  be  ordered ;  another,  is  to 
know  the  value  of  stock  destroyed  in  case  of  a  fire.  In  this  book  a  certain 
amount  of  space  is  allotted  to  each  class  of  goods,  and  an  account  kept 
therein  of  what  comes  in  and  what  goes  out.  After  having  written  the  name 
of  an  article  at  the  top  of  a  page  in  this  book,  it  need  not  be  repeated  in  the 
account,  as  only  the  quantity  is  thereafter  taken  into  consideration. 

When  an  invoice  is  received,  the  following  particulars  are  copied  there- 
from upon  the  left-hand  side  of  the  page  in  this  book,  namely,  the  date  of  the 
invoice,  the  initials  of  the  firm,  the  kind  of  goods,  and  the  quantity  thereof 
Whenever  goods  are  sold  from  this  stock,  the  quantity  is  taken  from  the 
Sales  Book  and  entered  at  the  right-hand  side  of  the  page.  The  difference 
between  the  two  sides  of  the  account  shows  the  stock  on  hand. 

1041.  In  taking  an  inventory  for  the  purpose  of  closing  the  books,  it 
should  never  be  taken  from  the  Stock  Books,  for  the  reason  that  these  books 
show  what  the  stock  should  be,  not  what  it  is.  For  instance :  should  any  of 
the  stock  have  been  stolen,  or  otherwise  have  mysteriously  disappeared  since 
the  books  were  last  closed,  an  inventory  taken  from  the  Stock  Books  would 
not  represent  the  actual  quantity  of  goods  on  hand.  The  only  way  to  ascer- 
tain the  true  value  of  the  stock  on  hand  is  to  proceed  in  the  old-fashioned 
way:  take  an  inventory  from  the  stock  itself 

PAGING   OF   BOOKS. 

1042.  In  order  to  indicate  in  the  folio  column  of  the  Journals  and  Cash 
Books  the  respective  Ledgers  into  which  the  items  are  posted,  it  is  a  good 
plan  to  have  the  Ledgers  paged  differently  from  each  other.  For  example, 
where  each  Ledger  contains  looo  pages,  have  the  Sales  Ledgers  paged  thus: 
A  to  G,  from  r  to  999 ;  II  to  N,  from  lOOO  to  1999;  O  to  Z,  from  2000  to  2999. 
The  Purchase  Ledger  may  be  paged  from  3000  to  3999,  and  so  on. 

The  Journals  and  Cash  Books  may  be  paged  in  the  same  manner. 
In  this  way  the  figures  in  the  folio-columns  serve  a  double  purpose :  they 
indicate  both  the  book  and  the  page  therein. 


1043-1045 


Book-Keeping  of  "A  i"  Houses. 


RETAIL. 


DEBITS. 

1043.  In  "A  i"  retail,  as  well  as  in  large  wholesale,  houses,  and  for  the 
same  purpose  in  the  former  as  in  the  latter,  the  stock  of  goods  is  divided 
into  departments.  While  a  salesman  in  a  wholesale  house  may  sell  goods 
from  several  different  departments,  a  clerk  in  a  large  retail  house  represents  a 
certain  department,  and  may  sell  goods  from  that  department  only. 

In  most  of  the  large  retail  houses  the  proprietors  wish  to  know  the  amount 
of  sales  made  by  each  clerk;  until  they  possess  this  knowledge  they  cannpt 
so  readily  determine  what  his  services  are  worth.  When  a  person  enters  upon 
a  clerkship  in  such  a  house,  he  is  given  a  clerk-number,  by  which,  instead  of 
by  his  name,  he  is  thereafter  known. 

1044.  The  term  "clerk"  will  be  used  throughout  this  article,  because  it 
is  a  shorter  word  than  "salesman;"  the  latter,  however,  is  in  more  general  use 
than  the  former,  but  its  application  is  perhaps  more  nearly  correct  when 
designating  those  persons  who  sell  goods  in  wholesale  houses.  Where  the 
term  "saleslady"  is  tolerated,  "salesgentleman,"  of  course,  ought  also  to  be 
used:  the  opposite  of  "salesman"  is  "szleswoman."  Practically,  "salesman" 
applies  to  both. 


THE  CHECK  SYSTEM. 

1045.  Sai.es-Tickets.— The  term  "check"  is  generally  used,  but  since 
there  is  a  possibility  of  ambiguity  and  confusion  on  account  of  there  being 
three  other  applications  of  this  term  in  business  —  a  bank  check,  to  check  off 
items,  a  check  against  falsification— it  is  thought  best  to  use  the  term 
"ticket"  in  this  article  instead  of  "check." 

.87 


DOUBLE   ENTRY    BOOK-KEEPING. 

Each  clerk  is  supplied  with  a  quantity  of  sales-tickets,  the  form  of  which 
varies  somewhat  in  different  houses,  but  is,  essentially,  as  follows : 


Department  Letter 
Dat 


SALES-TICKET. 
Clerk  No. 


Addres 
How  Delivered  .  .  . 


Cash  Received 

Cash  Boy  No 

Examined  by 

These  tickets  are  for  some  houses  bound  in  book  form,  and  for  others  in 
pads;  while  by  others  they  are  simply  inserted  in  adjustable  covers.  Such 
books,  pads,  or  covers  usually  contain  fifty  tickets  ;  but  some  contain  one 
hundred.  A  quantity  is  printed  for  each  department.  The  departments  are 
designated  by  letters  instead  of  by  their  names,  as  "A"  for  Silks  and  \'clvets, 
"B"  for  Laces,  etc.  These  department-letters  are  printed  in  bold,  distinct  type 
so  as  to  be  easily  discerned  while  assorting  and  gathering  together  the  tickets 
for  each  of  the  different  departments.  Each  ticket  has  printed  upon  it, 
usually  in  the  center  thereof,  a  sale-number.  The  figure  5  in  the  foregoing 
form,  represents,  for  example,  this  number.  These  numbers  run  consecu- 
tively through  the  clerk's  book,  or  pad,  beginning  with  I  and  ending  with  50. 
The  object  in  having  the  tickets  thus  numbered  is  for  the  purpose  of  knowing, 
at  the  close  of  each  day's  business,  whether  all  sales  have  been  accounted  for. 
Should  the  total  of  any  Summary  Sheet  not  agree  with  the  total  of  its 
corresponding  column  in  the  Clerks'  Sales  Book  (see  io6i),  the  amounts  on 
the  Summary  Sheet  are  checked  off  from  the  Clerks'  Sales  Book,  or  else  from 
the  tickets  themselves,  when  the  missing  number  will  be  indicated  on  the 
Summary  Sheet  on  the  line  with  the  unchecked  amount.  The  missing  ticket 
bearing  that  number  will  then  be  sought  for,  or  a  duplicate  ticket  be  procured 
from  the  person  w!io  made  the  original  ticket. 

188 


1046—1048 


DOUBLE    ENTRY    BOOK-KEEPING. 


104:6.  Summary  Sheet.— With  each  book,  or  pad,  a  clerk  is  given  a 
Summary  Sheet,  upon  which  are  printed  sale-numbers  running  from  i  to  50, 
to  correspond  with  those  on  the  sales-tickets.    The  following  is  the  form  of  a 

clerk's  summary  sheet. 

Cleric  No Department Date 


|S| 


When  a  sale  is  made,  the  particulars  thereof  are  written  upon  a  sales- 
ticket,  and  then  the  amount  of  the  sale  is  placed  on  this  Summary  Sheet, 
opposite  to  the  number  corresponding  with  that  on  the  ticket. 

At  the  close  of  the  day's  business,  each  clerk  ascertains  his  total  sales  for 
the  day  by  footing  the  amounts  on  his  Summary  Sheet ;  after  which,  he 
hands  this  sheet  to  the  head  of  his  department,  who,  after  having  received  all 
such  sheets  in  his  department,  passes  them  to  the  manager  of  the  checking 
department. 

1047.  Alternate  Ticket-Books. —  In  nearly  all  houses  they  have  a 
double  set  of  sales-ticket  books  for  alternation  —  the  books  used  on  one  day 
being  examined  and  checked  on  the  next.  When  this  is  done,  they  generally 
have  the  covers  of  the  books  used  on  Mondays,  Wednesdays,  and  Fridays  of 
one  color,  say  blue  ;  and  of  those  used  on  Tuesdays,  Thursdays,  and  Saturdays 
of  another  color,  say  red, — -this  being  for  the  purpose  of  knowing  at  sight 
whether  any  such  book  is  on  duty  on  its  off-duty  day. 

The  reason  why  these  books  have  to  be  passed  in  to  the  checking  depart- 
ment is  because  the  Summary  Sheet  is  now  nearly  always  printed  either  on 
the  cover  of  the  book,  or  on  a  separate  slip  of  paper  and  pasted  thereon. 
When  thus  secured,  this  Sheet  is  less  likely  to  become  lost  or  mislaid. 

1048.  Duplicate  Summary  Sheet.— There  is  a  method  of  reporting 
the  sales  to  the  checking  department  whereby  a  double  set  of  ticket-books  is 
rendered  unnecessary.  This  method  consists  in  supplying  each  clerk  with  an 
extra  Summary  Sheet  upon  which  the  sale-number  column  is  left  blank; 
then,  at  the  close  of  each  day's  business,  the  clerk  copies  from  the  original 
Summary  Sheet,  attached  to  his  ticket-book,  the  number  and  amount  of  each 
sale  made  during  that  day.  Where  this  is  done,  the  clerk  can  retain  his  ticket 
book  and  original  Summary  Sheet  until  all  the  tickets  are  used  up. 


189 


1049-1052 

DOUBLE   ENTRY   BOOK-KEEPING. 

1049.  Cash-Tickets.— When  a  cash  sale  is  made,  the  amount  of  cash 
received,  as  well  as  the  number  of  the  cash-boy  who  is  to  take  the  money  to 
the  cashier,  is  written  upon  the  sales-ticket.  This  ticket  is  then  sent,  first, 
to  a  cashier,  who  stamps  the  date  and  his  own  number  thereon  ;  then  it  is 
sent,  together  with  the  goods,  to  a  Parcel  Clerk,  who  compares  the  quantity 
of  articles  received  with  the  quantity  called  for  on  the  ticket.  If  they  agree, 
he  checks  the  items  and  stamps  on  the  ticket,  after  the  words  "Examined 
by,"  his  own  private  letter,  and  finally,  places  the  ticket  on  file,  or  drops  it 
into  a  tin  box  kept  for  that  purpose. 

1050.  Cashier's  Check.— With  every  cash-ticket  a  Cashier's  Check  is 
filled  out  and  sent  to  the  cashier.     The  following  is  the  form  of  a 

cashier's  check. 

Department  Letter 

Clerk  Number.  .J 

Amount  of  Sale 

Cash  Received 

The  aggregate  of  the  amounts  called  for  on  these  checks,  indicates  how 
much  cash  the  cashier  must  hand  in  as  his  day's  receipts. 

From  these  checks  the  total  cash  sales  made  during  the  day  by  each  clerk, 
and  in  each  department,  can  be  ascertained. 

1051 .  Cashier's  Coupon.— In  some  houses,  instead  of  having  a  separate 
check  for  the  cashier,  a  cashier's  coupon  is  attached  to  the  lower  end  of  the 
sales-ticket ;  then,  after  the  amount  on  the  ticket  has  been  compared  with 
the  amount  on  the  coupon,  and  found  to  agree,  the  cashier  stamps  the  date 
and  his  number  upon  both,  detaches  the  latter  from  the  former,  and  places 
the  coupon  on  file. 

1052.  In  a  house  where  they  have  several  cashiers  to  receive  the  money 
from  sales,  each  cashier  is  numbered  and  supplied  with  a  rubber  stamp.  This 
is  used  for  the  purpose  of  stamping  the  date  and  cashier-number  on  the 
tickets.  These  cashiers  are  usually  supplied  each  morning  with  from  $20  to 
$50  change.  During  the  day  they  are  several  times  called  upon  by  a  collector, 
who  collects,  in  round  sums  (giving  a  receipt  therefor)  nearly  the  amount 
taken  in,  leaving  with  each  cashier  the  original  change  amount. 

Each  cashier  has  a  relief-cashier,  who  is  furnished  with  the  same  amount 
of  change  as  the  cashier.  The  duty  of  the  relief-cashier  is  to  take  the  place 
of  the  cashier  whenever  the  latter  is  obliged  to  leave  his  desk. 

Certain  clerks  must  send  their  cash  from  sales  to  certain  cashiers,  and  not 
to  any  one  of  the  several  cashiers.  This  is  for  the  purpose  of  comparing  the 
total  of  cash  received  in  each  section  with  the  total  of  the  cash  sales  therein. 
This  requirement,  however,  as  also  that  of  having  relief-cashiers,  may  be 
obviated  by  first  assorting  all  the  cash-tickets  according  to  cashier-numbers 

190 


1053-1056 

DOUBLE   ENTRY    BOOK-KEEPING. 

after  they  reach  the  checking  department,  and  then  ascertaining  therefrom 
how  much  each  cashier  should  turn  in  as  his  total  cash  receipts.  Where  this 
is  done,  cash  from  a  sale  may  be  sent  to  any  cashier  in  the  house. 

1053.  Charge-Tickets.— When  goods  are  sold  on  account,  that  is, 
when  they  are  not  paid  for,  the  name  and  address  of  the  customer  are  written 
on  the  sales-ticket;  after  which,  all  other  particulars  of  the  sale  are  added. 
This  ticket  is  then  called  a  charge-ticket,  or  a  charge-check.  After  such  a 
ticket  has  been  filled  out  and  the  amount  of  the  sale  entered  on  the  Sum- 
mary Sheet,  the  ticket  passes  through  several  hands.  First,  it  is  sent  to  the 
Credit  Man,  who  determines,  if  it  be  a  new  customer,  whether  or  not  the 
goods  shall  be  delivered  to,  and  an  account  opened  with,  him ;  second,  to  the 
Packer  in  the  delivery  department,  who  examines  and  stamps  it,  if  it  is  found 
correct ;  third,  to  the  charge  department,  where  it  is  entered  in  the  respective 
Sales  Ledger  to  which  it  belongs  — the  items  of  the  sale  being  copied  into 
this  Ledger  in  full,  as  they  appear  on  the  charge-ticket. 

Thus  it  will  be  seen  that  direct  from  the  original  entry  — from  the  ticket 
which  was  made  by  the  clerk  when  the  goods  were  sold  —  the  final  entry  is 
made.  While  both  these  writings  are  absolutely  necessary,  any  copying  of 
the  original  before  the  final  writing,  would  be  absolutely  and  inexcusably 
««necessary. 

1054.  A  case  is  known  where  the  items  of  a  sale  are  thrice  written  before 
the  charge  reaches  the  Ledger.  In  this  house,  such  items  are  first  written  on 
a  sales-ticket,  thence  into  a  Day  Book,  and  thence,  again,  into  a  Sales  Book! 
The  only  good  derived  from  such  an  extended  manipulation  of  business  trans- 
actions, is  that  which  accrues  to  the  book-keeping  fraternity,  namely:  that  it 
affords  employment  to  a  host  of  extra  clerks  and  book-keepers  which  other- 
wise, with  a  simpler  system,  would  not  be  required. 

1055.  Cash,  C.  O.  D.,  and  Charge  Tickets.— In  many  houses,  only 
one  form  of  sales-ticket  is  used  for  cash,  C.  O.  D.,  and  charge  sales;  then, 
only  one  sales-ticket  book,  with  one  summary-sheet,  is  required  for  each  clerk. 
Such  is  the  method  described  in  this  book.  (For  form  of  this  sales-ticket,  see 
1048.)  When  goods  are  sold  for  cash,  a  cashier. stamps  the  sales-ticket,  which 
then  becomes  a  cash-ticket,  or  cash-check.  When  goods  are  not  paid  for,  it 
is  determined  by  the  Credit  Man  whether  they  shall  be  sent  "collect  on 
delivery,"  or  an  account  be  opened  (if  the  person  be  a  new  customer)  and  the 
amount  charged  thereto.  After  it  has  been  so  determined,  the  ticket  is 
stamped  accordingly,  that  is,  either  "C.  O.  D."  or  "Charge." 

In  most  houses,  however,  they  do  not  use  one  ticket  in  common  for  all 
sales,  but  have  a  different  ticket  for  each,  "Cash,"  "C.  O.  D.,"  and  "Charge" 
—  each  being  printed  in  distinct  characters  on  paper  of  a  different  color. 

1056.  Duplicate  Sales-Tickets.— In  order  to  guard  against  loss  occa- 
sioned by  sales-tickets  sometimes  going  astray,  nearly  all  houses  require  their 
clerks  to  make,  as  soon  as  the  original  ticket  has  been  filled  out,  a  duplicate. 


1057—1058 

DOUBLE    ENTRY    BOOK-KEEPING. 

or  full  copy  thereof.  Some  houses,  however,  object  to  the  duplicate  ticket  on 
the  ground  that  both  original  and  duplicate  may  become  lost ;  they  conse- 
quently require  the  copy  to  be  made  in  a  small  memorandum  book.  These 
duplicate  tickets  or  books  are  sent  directly  to  the  checking  department, 
where  they  serve  as  checks  against  the  original  tickets,  as  well  as  for  refer- 
ence in  case  an  original  ticket  should  become  lost. 

1057.  Packer's  Coupon.— In  those  houses  where  they  do  not  require 
the  clerks  to  make  duplicate  sales-tickets,  or  to  copy  the  items  on  the 
original  tickets  in  memorandum  books,  a  "Packer's  Coupon"  is  attached  to 
the  charge  and  C.  O.  D.  sales-tickets.  Then,  when  a  sale  is  made,  the  name 
and  address  of  the  purchaser,  together  with  the  amount  of  the  sale,  are 
written  on  this  coupon.  If  the  register-number  method  is  used  (see  1072)  the 
register-number  is  also  written  on  the  coupon.  The  goods  are  then  sent, 
together  with  the  ticket,  to  the  Packer  in  the  delivery  department,  who 
checks  the  items  on  the  ticket  and  then  packs  the  goods  for  delivery — writing 
the  particulars  of  the  coupon  on  the  package.  Then,  the  ticket  is  sent  to  the 
charge  department,  where  the  coupon  is  detached  therefrom  and  returned  to 
the  Packer,  who  then  delivers  the  goods.  The  Packer  is  not  allowed  to  deliver 
any  packages  until  the  corresponding  coupons  have  been  detached  from  their 
tickets  and  returned  to  him  from  the  charge  department. 

Thus,  no  charge  or  C.  O.  D.  goods  can  go  out  of  the  house  until  the  ticket 
therefor  has  been  secured  in  the  charge  department. 

1058.  Lines  on  S.ales-Tickets  Numbered.— Some  houses,  instead  of 
requiring  their  Parcel  Clerks  to  carefully  examine  the  quantity  called  for  in 
each  item  on  a  sales-ticket,  require  them  simply  to  count  the  number  of 
lines  in  order  to  ascertain  how  many  articles  are  to  be  enclosed  in  the  pack- 
age ;  then,  if  there  are  as  many  articles  received  as  there  are  lines  filled  on 
the  ticket,  the  articles  are  enclosed  in  a  package  and  the  ticket  stamped  or 
signed  as  examined.  Where  this  is  done,  it  is  here  suggested  that  the  lines 
on  the  tickets  be  numbered  when  printed ;  for  sometimes  the  Parcel  Clerks, 
when  pressed  with  work,  do  not  take  time  to  count  the  number  of  items  on 
the  tickets,  but  take  it  for  granted  that  they  agree  with  the  number  of  articles 
received,  and  accordingly  stamp  or  sign  the  tickets.  When  the  lines  are 
numbered,  the  number  of  articles  that  should  be  enclosed  in  the  package  is 
indicated  on  the  line  with  the  last  item,  and,  therefore,  the  counting  of  the 
lines  is  rendered  unnecessary. 


192 


1059—1061 

:y  BOOK-Ki;i:riNG. 


CHECKING    DEPARTMENT. 

1059.  At  the  close  of  the  day's  business,  all  tlie  cash-tickets  received 
during  the  day  by  the  Parcel  Clerks,  and  all  the  charge-tickets  received  during 
the  day  by  the  charge  book-keepers,  are  collected  and  taken  to  the  checking 
department,  where,  on  the  day  following,  the  extensions  and  footings  thereon 
are  examined,  for  the  purpose  of  learning  whether  any  errors  have  been 
made.  After  having  been  stamped  "correct"  by  the  figuring-clerks,  they  are 
assorted,  for  the  purpose  of  ascertaining  the  following  particulars,  namely : 
first,  the  total  of  each,  and  of  both,  cash  sales  and  charge  sales  made  by  each 
clerk ;  second,  the  total  of  each,  and  of  both,  cash  sales  and  charge  sales 
made  in  each  department ;  third,  the  total  of  each,  and  of  both,  cash  sales  and 
charge  sales  made  in  all  departments;  fourth,  the  total  charge  sales  to  be 
posted  into  each  Sales  Ledger. 

The  total  cash  sales  made  by  each  clerk,  and  in  each  department,  as 
ascertained  from  the  cash  sales-tickets,  must  agree  with  the  totals  ascertained  . 
from  the  cashier's  checks,  or  coupons. 

The  grand  total  of  the  charge  sales,  ascertained  from  the  charge  sales- 
tickets,  must  agree  with  the  aggregate  of  the  amounts  posted  into  the  several 
Sales  Ledgers.  This  aggregate  is  ascertained  thus  :  each  charge  book-keeper 
keeps  a  proof  slip,  like  that  described  in  paragraph  966,  upon  which  he  enters 
the  extended  amounts  of  each  sale  posted  into  his  Ledger;  at  the  close  of 
each  day,  he  finds  the  sum  total  of  the  amounts  on  his  proof  slip ;  this  total 
must  agree  with  the  sum  ascertained  in  the  checking  department  as  requiring 
entry  in  liis  book — which  total,  when  taken  together  with  the  totals  on  all 
the  charge  book-keepers'  proof  slips,  makes  the  aggregate  charge  sales  posted 
in  the  charge  department.  This  aggregate  of  the  postings  made  by  all  the 
book-keepers  combined  must  agree  with  that  ascertained  in  the  checking 
department. 

1060.  \\\  some  houses  the  charge-tickets  are  sent  to  the  checking  depart- 
ment first — on  the  day  they  are  made  out  —  in  which  case  the}-  do  not  reach 
the  charge  department  until  the  day  following.  Since  the  charge  department 
is  of  more  importance  than  the  checking  department,  it  seems  that  the  former 
should  have  the  preference  with  respect  to  the  first  handling  of  the  ticket ; 
for,  if  the  ticket  were  lost  in  transit  from  one  of  these  departments  to  the 
other,  it  were  better  that  the  loss  should  occur  after  the  ticket  has  been  duly 
entered  in  its  proper  Sales  Ledger,  rather  than  before,  because  the  charge  will 
then  be  secured  against  the  purchaser,  which  is  of  far  greater  importance 
than  the  credit  for  the  departments. 

1061.  Clerks'  Sales  Book.  —  This  is  a  book  consisting  of  money- 
columns,  at  the  top  of  which  the  clerk-numbers  are  written  in  consecutive 
order.  Under  each  clerk-number  is  also  written  the  department-letter,  to 
indicate  in  which  department  the  clerk  is  employed. 

193 


1062-10G4 


DOUBLE   ENTRY   BOOK-KEEPING. 


In  order  to  show  the  tota'i  of  each,  and  of  both,  cash  sales  and  charge  sales 
made  by  each  clerk,  it  is  best  to  have  a  book  ruled  for  three  money-columns 
under  each  clerk-number.     The  following  form  is  recommended  for  a 

CLERKS'  SALES   BOOK. 


2 
G 


After  the  sales-tickets  have  been  assorted  according  to  clerk-numbers, 
the  amounts  thereon  are  entered  in  these  columns  under  the  respective 
clerk-numbers  to  which  they  belong  —  the  amounts  on  the  cash-tickets  under 
"Cash,"  on  the  charge-tickets  under  "Charge."  After  all  such  tickets  have 
been  thus  entered,  the  footing  of  each  column  is  found;  then  the  sum  of  both 
columns  is  extended  into  the  "Total"  column  ;  after  which,  the  latter  amount 
is  compared  with  the  footing  on  the  clerk's  corresponding  Summary  Sheet. 
If  these  footings  agree,  both  are  proved  correct.  It  is  further  proved  that  no 
cashier  has  altered  an  amount  on  any  cash-ticket,  and  that  no  charge  book- 
keeper has  tampered  with  the  amount  on  any  charge-ticket. 

In  some  houses,  large  sheets  of  manilla  wrapping-paper  are  used  instead 
of  this  book. 

10f)2.  C.  O.  D.  Sales.— Sometimes  the  C.  O.  D.  sales  are  kept  apart 
from  the  charge  sales  and  entered  in  a  separate,  or  C.  O.  D.,  Ledger.  Where 
this  is  done,  an  extra  column  is  required  between  the  "Cash"  and  "Charge" 
columns  in  the  Clerks'  Sales  Book,  in  which  to  enter  the  amounts  of  the 
C.  O.  D.  sales. 

1063.  M.  O.  D.  Sales. — Some  houses  wish  to  know  the  amount  of  goods 
sold  during  the  year  on  orders  received  by  mail.  This  necessitates  a  Mail 
Order  Department,  wherein  is  kept  a  record  of  all  sales  made  to  customers 
through  mail  orders.  The  M.  O.  D.  sales  are  kept  separate  from. the  cash, 
C.  O.  D.,and  charge  sales  for  the  purpose  of  ascertaining  the  total  sales  made 
in  tlie  Mail  Order  Department. 

10()4.  Department  Sales  Book. — With  the  exception  of  a  date  column 
at  the  left  of  each  page,  this  book,  also,  consists  entirely  of  money-columns. 
It  is  divided  into  sections  according  to  departments  —  a  certain  space  being 
allotted  to  each  department.     Each  page  in  this  book  represents  the  sales  in 


194 


1064 


DOUBLt:    ENTRY   BOOK-KEEl'ING. 


a  certain  department  for  one  month.  Across  the  top  of  the  page,  and  over 
the  head-hne,  the  name  of  the  department  is  written.  In  some  houses  the 
department-letter  is  written  instead  of  the  full  name  of  the  department. 
At  the  top  of  the  columns  on  this  page,  all  the  clerk-numbers  belonging  to 
this  department  are  written  ;  therefore,  certain  clerk-numbers  represent  cer- 
tain departments.  This  being  the  case,  some  houses  let  this  number  suffice 
to  indicate  not  only  the  clerk,  but  also  the  department,  to  be  credited  — thus 
avoiding  the  extra  expense  of  having  sales-tickets  printed  for  each  of  the 
different  departments. 

The  following  is  the  form  of  a 

DEPARTMENT  SALES   BOOK. 

Dress  Goods  Department;  or,  D. 


Date. 

75 

« 

77 

73 

79 

80 

.^    1 

1886 

1 

S«pt. 

1 

I    » 

3 

4 

30 

- 

— 

— 

— 

Gross  Sales, 



— 

— 

Returns, 
Net  Sales. 

— 

— 

— 

~ 

— 

— 

After  having  proved  all  the  columns  in  the  Clerks'  Sales  Book,  the  total 
of  each  column  is  transferred  to  the  department-page  and  clerk-number  col- 
umn to  which  it  belongs  in  this  Department  Sales  Book  —  thus  showing,  on  a 
line  with  the  day  of  the  month  under  their  respective  clerk-numbers,  each 
clerk's  sales  in  this  department  for  the  day.  At  the  end  of  this  line,  under 
"Total,"  the  aggregate  of  the  sales  made  by  all  the  clerks  in  this  department 
is  extended  —  being  the  total  sales  in  this  department  for  the  day.  At  the 
end  of  the  month,  the  footing  of  each  column  on  this  page  is  ascertained,  and 
placed  on  a  line  with  "Gross  Sales;"  then,  from  the  Credit  Book  are  ascer- 
tained the  amounts  to  be  taken  off  the  sales  on  account  of  some  of  the  goods 
•^old  by  such  clerks  having  been  returned.  These  amounts  are  placed  on  the 
line  with  "  Returns  ;"  after  which,  the  amount  of  the  "  Net  Sales"  of  each  clerk 
is  ascertained  by  subtracting  the  "returns"  from  the  "gross  sales."  The  net 
sales  in  the  "Total"  column  should  agree  with  the  aggregate  0/  the  net  sales 
in  the  several  clerk-number  columns. 

Sometimes  the  "returns"  arc  deducted  daily  in  the   Clerks'  Sales  Book, 


195 


1065—1067 


DOUBLE   ENTRY   BOOK-KEEPING. 


and  only  the  net  sales  transferred  to  the  Department  Sales  Book.  Where 
this  is  done,  foot-lines  for  "gross  sales"  and  "returns"  are  not  required  on 
the  latter  book. 

1065.  Dep.\rtment  Ledger. — Directly  from  the  "Total"  column  in 
the  Department  Sales  Book,  the  sales  are  posted  to  the  respective  depart- 
ment-accounts in  a  Department  Ledger.  This  latter  book  may  be  of  the 
common  form  of  ledger-ruling,  and  simply  the  net  sales  posted  therein  ;  or, 
it  may  be  ruled  so  as  to  show  the  gross  purchases  and  gross  sales,  the  goods 
returned  by  and  to  the  house,  and  the  net  purchases  and  net  sales,  thus: 

DEPARTMENT   LEDGER. 
Dress  Goods;  or,  D. 


11       Date. 

FoUo.  Purchases. 

Returns. 

P.^fi„. 

Date 

i886 

1S86 

Oct. 

30 

Oct. 

Nov. 

30 

Nov. 

Dec. 

31 

Dec. 

I  Folio. 


Returns.  '{Net Sales. 


I    I 


1066.  Abstract  of  Daily  Sales. — In  order  to  show,  in  a  compact 
form,  the  daily  sales  in  each  department,  and  in  all  the  departments  com- 
bined, in  such  a  manner  that  the  sales  of  the  present  year  may  be  at  once 
compared  with  those  of  the  previous  year,  the  following  form  is  recommended 
for  an 

ABSTRACT   OF   DAILV   SALES. 

September. 


Silks  and  Velvets 

Notions 
D  Dress  Goods 


The  figures  i,  2,  and  3  at  the  top  of  the  above  columns  represent  the  ist, 
2d,  and  3d  days  of  the  month.  This  form  may  be  extended  in  length,  of 
course,  for  as  many  lines  as  there  are  departments  ;  also,  in  width  for  the 
days  of  the  month. 

1067.  Abstract  of  Monthly  Sales.— A  portion  of  the  Abstract  of 
Daily  Sales  majf  be  reserved  in  which  to  make  an  abstract  of  the  vionthly  sales. 
When  this  is  done,  in  the  place  where  the  days  of  the  month  appear  the 
months  of  the    year    are    placed;    as,  January,  February,  March,  etc.     The 


iq6 


1068—1001) 


DOUBLE    ENTRY   BOOK-KEEPING. 


amounts  placed  in  these  columns  are  those  found  on  the  "Net  Sales"  line  in 
the  "Total"  columns  of  the  Department  Sales  Book.  The  footings  of  the 
columns  in  this  Abstract  of  Monthly  Sales  will  show  the  aggregate  net  sales 
in  all  departments  for  each  month  of  the  respective  years. 

1068.  Clerks'  Abstract  Book. — This  is  an  auxiliary  book,  kept  for 
the  purpose  of  showing  the  periodic  sales  of  each  clerk.  It  is  in  form  as 
follows : 

clerks'  abstract  book. 

Dress  Goods;   or,  D. 


1 

7S 

76 

77 

78 

79 

80 

81 

Month 

Year. 

Chatard. 

Williams. 

Borden. 

Buddee. 

Fife. 

Marshall 

FrosL 

Sept. 

i8S6 

t 

Oct. 

" 

Nov. 

" 

Dec. 

•• 

Jan. 

.887 

The  total  of  the  monthly  net  sales  made  by  each  clerk  is  transferred  from 
the  "Net  Sales"  line  in  the  Department  Sales  Book  to  his  column  on  a  line 
with  the  proper  month  in  this  Clerks' Abstract  Book.  In  some  houses  these 
periodic  sales  are  ascertained  weekly,  bi-weekly,  or  once  every  ten  days, 
instead  of  monthly. 

This  book  is  kept  merely  as  an  aid  in  determining  the  value  of  each 
clerk's  services.  From  a  periodic  examination  of  the  entries  in  this  book,  he 
who  fi.xes  the  salaries  of  the  clerks  can  acquire  a  valuable,  though  not  com- 
plete, aid  toward  learning  what  the  service  of  each  is  worth.  He  can  also 
keep  himself  constantly  posted  as  to  whether  the  value  of  a  clerk's  service  is 
increasing  or  diminishing,  and  adjust  his  salary  accordingly. 

The  reason  why  the  value  of  a  clerk's  services  cannot  be  entirely  deter- 
mined by  the  aggregate  of  his  sales,  is,  that  he  may  have  in  his  special  posi- 
tion in  the  department  certain  goods  which  are  very  popular,  or  which  have 
been  extensively  advertised  as  "special  bargains."  Thus,  although  he  may 
be,  in  fact,  the  poorest  salesman  in  the  house,  he  will  make  larger  sales  than 
any  other  clerk  in  his  department. 

The  manager  of  the  division  in  which  a  certain  clerk  is  employed,  should 
always  be  consulted  respecting  both  the  ability  and  the  a^ability  of  the 
clerk  before  his  salary  is  fixed.  The  information  thus  derived  should  be  con- 
sidered together  with  the  facts  obtained  from  an  examination  of  the  summary 
of  his  sales,  when  a  very  fair  estimate  as  to  the  value  of  his  services  can  be 
made. 

1069.  Whenever  a  clerk  is  changed  from  one  department  to  another,  it 
is  customary  to  give  him  a  new  clerk-number.  If  this  is  not  done,  some 
difficulty    is    experienced   in    using   a   Clerks'  Abstract    Book   of   this   form, 


197 


1070-1072 

DOUBLE    ENTRY    BOOK-KEEPING. 

because  the  numbers  are  arranged  in  tliis  book  so  as  to  run  consecutively  in 
each  section,  or  department. 

1070.  On  Proving  the  Sales  Tickets.  — When  the  footing  of  each 
"Total"  column  in  the  Clerks'  Sales  Book  has  been  compared  with  the  footing 
on  the  clerk's  corresponding  Summary  Sheet  and  found  to  agree,  it  is  proved 
that  all  the  sales-tickets  have  been  accounted  for,  and  that  no  ticket  is 
missing.  When  these  footings  do  not  agree,  the  missing  No.  shows  which 
ticket  is  lost  or  mislaid. 

1071.  On  Filing  the  Sales-Tickets.  — When  the  footings  on  the 
charge  book-keepers'  proof-slips,  made  in  the  charge  department,  agree  with 
footings  ascertained  in  the  checking  department  as  requiring  to  be  posted 
into  the  different  Sales  Ledgers,  the  proof-slips  are  stamped  "O.  K."  by  the 
manager  of  the  checking  department,  and  together  with  the  charge-tickets, 
returned  to  the  respective  charge  book-keepers  to  whom  they  belong.  These 
book-keepers  then  arrange  the  tickets  in  alphabetical  order,  place  paper 
bands  around  them,  and  write  upon  the  latter  the  date  ;  after  which,  they 
put  the  packages  thus  formed  into  boxes  kept  for  that  purpose,  upon  each  of 
which  is  labeled  the  Sales-Ledger  letters,  as,  A  to  E,  or  F  to  K. 

When  the  footings  ascertained  from  the  cashier's  checks,  or  coupons, 
agree  with  the  footings  ascertained  from  the  cash  sales-tickets,  these  checks 
and  tickets  are  made  into  separate  packages,  dated,  and  filed  away. 

1072.  Register-Sheet  Method.— There  is  another  method  of  "keep- 
ing track  of"  the  charge  tickets  after  they  leave  the  clerks,  which  may  be 
described  as  follows:  (i)  a  quantity  of  Register  Sheets  are  printed  so  as  to 
have  one  Sheet  for  each  day  of  the  year;  the  printing  on  these  sheets  con- 
sists of  numbers  running  in  consecutive  order  from  i  to  a  number  sufficiently 
large  to  cover  all  the  charge  sales  that  we  will  probably  make  on  any  single 
day,  as,  I  to  looo,  or,  l  to  5000;  (2)  a  consecutive  numbering-stamp  is  used 
with  which  to  number  each  charge-ticket  immediately  upon  its  being  made 
out  by  the  clerk;  (3)  to  the  lower  end  of  the  charge-ticket  is  attached  a 
coupon  containing  the  clerk-number,  the  purchaser's  name,  and  the  amount 
of  the  sale,  upon  which  coupon  is  also  stamped  the  same  register-number  as 
that  on  the  charge  ticket ;  after  which,  this  coupon  is  detached  from  the 
charge-ticket  and  placed  upon  a  file  near  the  numbering-stamp;  (4)  the 
charge-ticket  is  sent,  together  with  the  goods,  to  the  Packer  in  the  delivery 
department,  who  examines  and  checks  it,  observing,  as  he  does  so,  whether 
the  register-number  is  stamped  thereon,  since  he  is  not  allowed  to  pass 
any  tickets  which  do  not  bear  such  a  number  ;  (5)  the  ticket  is  then  handed 
to  the  proper  charge  book-keeper,  who  enters  it  in  his  Ledger;  (6)  it  is 
passed  to  a  person  in  charge  of  the  Register  Sheet,  who,  with  his  pen,  can- 
cels on  this  Sheet  the  register-number  indicated  on  the  charge-ticket ;  (7) 
and  finally,  it  is  sent,  together  with  all  the  other  charge-tickets,  to  the 
checking  department. 

If  any  number  on  the  Register  Sheet  remains  uncanceled  at  the  close  of 

198 


107 


DOUBI.K   ENTRY   BOOK-KEEPING. 

the  day,  it  will  at  once  be  known  that  some  ticket  has  not  been  "turned  in," 
whereupon  the  coupon  for  that  number  will  be  found  on  the  file  near  the 
numbering-stamp,  and  the  clerk-number  as  well  as  the  amount  of  the  sale 
learned  therefrom  ;  after  which,  a  duplicate  charge-ticket  is  obtained  from 
the  clerk,  the  packer  consulted  regarding  the  delivery  of  the  goods  and  this 
ticket  passed  through  in  the  same  manner  as  though  it  were  the  original 
ticket. 

By  this  method  it  is  clearly  proved  that  all  charge-tickets  pass  through 
the  book-keepers'  hands ;  further,  if  a  ticket  goes  astray,  that  fact  is  discov- 
ered before  the  tickets  reach  the  checking  department. 

1073.  Register-Book  Method.— Similar  to  the  Register-Sheet,  and 
kept  for  the  same  purpose,  is  the  Register-Book  method.  The  following  is 
the  form  of  a 

register  book. 


Nov.  4,  i886. 


'■'iT 


Clerk 

No. 

Amount. 

/ 

This  book  contains  fifty  lines  on  a  page.  Under  "  Register  No."  arc  printed, 
■in  alternate  columns,  numbers  running  from  i  to  50,  and  from  51  to  00.  These 
numbers  are  more  convenient,  however,  when  running  from  GO  to  49,  and  from 
50  to  99,  for  then  the  even  hundreds  ("oo")  always  begin  at  the  top  of  their 
respective  columns  instead  of  at  the  bottom  of  the  preceding  column.  There 
are  four  columns  on  a  page,  representing  therein  two  hundred  sales.  Each 
day  the  register-numbers  begin  anew,  that  is,  with  No.  I. 

A  consecutive  numbering-stamp  is  used,  and  a  register-number  stamped 
therewith  upon  each  charge-ticket.  Whenever  a  register-number  is  stamped 
upon  a  ticket,  it,  together  with  the  clerk-number  and  the  amount  of  the  sale, 
(as  indicated  on  the  ticket)  is  called  off  to  the  clerk  in  charge  of  the  Register 
Book,  who  enters  on  its  proper  line  and  in  their  proper  columns,  the  clerk- 
number  and  the  amount  of  the  sale.  Therefore,  where  this  method  is  adopted, 
no  coupon  is  required  on  the  charge-ticket. 

After  the  first  two  columns  of  a  day's  sales  have  been  filled,  the  clerk  must 
write  in  at  the  top  of  the  succeeding  "  Register  No."  columns,  the  "  hundreds  ; " 
as,  for  example:  at  the  top  of  the  third  column,  101;  fourth,  151;  fifth,  201; 
and  so  on.  When  a  da\'s  sales  have  been  completed,  the  numbers  for  the  day 
following  may  be  begun  in  the  next  "Register  No."  column  in  which  appear 
the  figures  i,  2,  3,  etc. —  thus  wasting  but  very  little  space  in  the  book. 


1074 

DOUBLE    ENTRY    BOOK-KEEPING. 

At  the  close  of  the  day,  this  book  is  sent  to  the  checking  department, 
where,  on  the  day  following,  the  amounts  are  compared  with  those  on  the 
corresponding  charge-tickets.  Such  amounts  as  agree  are  checked  off  on 
this  book  in  the  column  headed  thus,  "  •!."  If  any  of  these  amounts  do  not 
agree,  the  clerk's  summary  sheet,  or  else  his  duplicate  ticket,  is  referred  to 
and  the  amount  of  the  sale  compared  with  the  amount  entered  in  the  Register 
Book.  If  these  latter  amounts  agree,  it  will  be  known  that  the  amount  on 
the  ticket  has  been  changed  by  the  book-keeper;  for,  after  the  register- 
number  was  stamped  on  the  charge-ticket,  the  latter  passed  through  the 
charge  book-keeper's  hands  and  was  by  him  entered  in  his  Sales  Ledger  — 
finally,  being  sent  to  the  checking  department.  Thus,  the  manager  of  the 
checking  department  ascertains  (through  the  Register  Book)  the  amounts  on 
all  the  charge-tickets  before  they  reached  the  charge  book-keepers,  as  well 
as  after  they  have  been  entered  by  them,  thereby  precluding  the  possibility 
of  changing  the  amount  on  any  charge-ticket  without  its  immediate  discovery. 

If  any  amount  on  the  Register  Book  remains  unchecked  after  all  the 
tickets  have  been  passed  over,  the  clerk-number  is  at  once  here  shown,  a 
duplicate  ticket  obtained  from  the  clerk,  and  the  same  proceedings  are 
followed  as  when  a  number  remains  uncanceled  in  the  Register-Sheet  method. 

In  some  houses  the  register-numbers  are  written  on  the  back  of  the  tickets 
with  a  blue  pencil.  This  necessitates  the  turning  over  of  each  ticket  when 
numbering  and  also  when  comparing  the  amount  thereon  with  the  amount  in 
the  Register  Book.  It  also  affords  a  possibility  of  the  making  of  duplicate 
tickets,  and  a  consequent  possibility  of  the  stealing  of  goods  and  the  passing 
of  spurious  tickets  to  the  Packer.  There  is  no  possibility  of  the  numbers 
being  duplicated  when  a  numbering-stamp  is  used,  and  there  is  no  disputing 
the  genuineness  of  the  number,  as  there  might  be  when  the  register-numbers 
are  written  upon  the  tickets  with  a  pencil. 

There  are  always  two  of  these  Register  Books  —  for  alternation  ;  in  some 
houses  there  are  six  —  one  for  each  day  in  the  week. 

In  some  houses  register-numbers  are  placed  upon  all  the  sales-tickets  — 
cash,  C.  O.  D.,  and  charge.  Then,  if  any  ticket  becomes  lost  or  mislaid,  that 
fact  is  at  once  known  through  the  unchecked  register-number. 

1074.  While  the  Register-Sheet  method  merely  insures  the  passing  of 
all  charge-tickets  through  the  book-keepers'  hands,  and  their  safe  deliveii)-  to 
the  checking  department,  the  Register-Book  method  further  compares  the 
amounts  which  appeared  on  the  tickets  when  they  left  the  clerks'  hands  with 
those  which  appear  on  them  after  they  have  passed  through  the  book-keepers' 
hands.  Thus,  it  is  at  once  ascertained  whether  the  amount  on  any  ticket  has 
been  changed  since  the  register-number  was  placed  thereon. 

The  latter  result,  however,  may  also  be  obtained  in  the  Register-Sheet 
method  by  first  arranging  the  charge-tickets  in  numerical  order  (as  to 
register-numbers),  and  then  comparing  the  amounts  on  the  tickets  with  those 
on  their  corresponding  coupons. 


1075 


DOUBLE   ENTRY   BOOK-KEEPING. 

1075.  Sales-Sheet.— A  large  sheet  of  paper  ruled  with  money-columns 
is  used  by  some  managers  of  checking  departments  for  the  purpose  of  figuring 
thereon  the  amount  to  be  credited  to  each  department.  It  can  also  be  learned 
from  this  sheet  how  much  the  total  of  each,  cash  sales,  C.  O.  D.  sales,  and 
charge  sales  is  in  each  department,  as  well  as  the  aggregate  of  each  in  all 
departments.  This  sheet  also  shows  the  total  charge  sales  for  each  Sales 
Ledger.     Following  is  the  form  of  a 

SALES   SHEET. 


A 

B 

c 

D 

Totals  in  all 
Departments. 

AtoG 

6 

E 

50 
45 

■4 

25 

50 
30 

= 

9I 

50 

300 
400 

40 

60 
75 

1             HtoN 

.i: 

30 

~ 

50 

1? 
4S 

0  to  Z 

■5 

30 
50 

75 

60 

- 

260 

Total  in   each! 
Department  r 

3'3 

.«5 

- 

140 

- 

•440 

60 

.018 
»39 

2264 

75 
40 

«5 

Q 

d 

It 
6i 

40 

" 

— 

5 

— 

,   s               Total   in   each! 
U                  Depaitmenlf 

40 

" 

5 

Cash. 

8a 
55 
7° 
90 

300 

25 

30 

60 
50 
70 
92 
120 

15 
60 

75 

70 
90 
120 
160 

55 
"5 

80 

60 
93 
170 
120 

It 

45 

n^iTttre^nl} 

7>5 

65 

39« 

557 

598 

Grand  Total  in  each  Department 

"51 

517 

75 

709 

80 

1044 

OS 

3422 

80 

This  Sheet  is  extended  in  width  for  as  many  columns  as  there  are  depart- 
ments. The  figures  for  the  charge  and  C.  O.  D.  sales  are  taken  from  the 
sales-tickets,  while  those  for  the  cash  sales  are  the  totals  taken  from  the 
"  Cash  "  column  in  the  Clerks'  Sales  Book.  The  footings  throughout  the  Sheet 
are  written  in  red  ink  so  as  to  aid  in  ascertaining  the  grand  total  of  the  sales 
in  each  department.  The  aggregate  of  the  amounts  on  the  grand  total  line 
should  acrec  with  the  footing  of  the  total  column. 


1076-1077 


DOUBLE   ENTRY   BOOK-KEEPING. 


CHARGE    DEPARTMENT. 


1076.  The  method  of  keeping  customers'  accounts  in  a  large  wholesale 
house  necessarily  differs  from  that  of  the  keeping  of  same  in  a  large  retail 
house.  In  the  former,  whenever  goods  are  sold,  a  bill  is  given  to  the  cus- 
tomer;  while  in  the  latter,  a  bill  is  not  made  until  the  end  of  each  month,  at 
which  time  it  takes  the  form  of  an  itemized  statement,  showing  all  goods  sold 
to,  and  all  payments  made  by,  the  customer  during  the  month.  Sometimes, 
however,  customers  request  us  to  send  bills  with  their  goods.  In  such  cases, 
in  order  to  oblige  them,  we  comply  with  their  requests.  There  are  still  a  few 
houses  which  adhere  to  the  old  practice  of  sending  memorandum  bills  of  all 
goods  sold  on  account. 

In  some  of  the  largest  retail  houses,  as  many  as  five  thousand  charge 
sales  are  made  in  a  single  day.  To  record  these  in  the  same  manner  as  they 
are  recorded  in  large  wholesale  houses,  would  necessitate  very  great  expense, 
both  in  the  salaries  of  entry-clerks,  and  in  the  cost  of  Sales  Books.  If  the 
sales  were  recorded  in  Sales  Books,  as  in  a  wholesale  house,  and  simpl}-  the 
date,  page,  and  amount  posted  to  the  Ledger,  it  would  be  impossible  to  make 
statements  for  the  customers  at  the  end  of  the  month.  For  instance,  should 
we  make  several  sales  to  a  certain  customer  during  the  month,  the  charges 
would  doubtless  be  recorded  in  several  Sales  Books.  Then,  at  the  end  of  the 
month,  the  very  books  we  required  from  which  to  make  a  statement  for  this 
customer  might  be  scattered  "all  over  the  house,"  and,  possibly,  one  or  more 
of  them  might  at  that  time  be  in  active  use.  To  obviate  this  difficult)-,  the 
items  of  all  sales  are  copied  directly  from  the  charge-tickets  into  the  cus- 
tomers' accounts,  in  the  following  simple  form  of  a 


RETAIL    SALES    LEDGER. 

1077.  Sidney  E.  Goodwin,  Ji2  Madison  Ave. 


i886 

July 

i6 

6  yds.  Cord  ^r         2  sp.  Silk  .05° 

1    ^' 

20    ■•    Silk  .2?  °°      7M  Cashmere  for'^   '' 
2ji  doz.  Buttons  45^         I  pr.  Gloves 

3» 

04 

90 

J  yd.  Fringe 

4 

n 

•9 

7H  Cashmere 

for 

' 

<H 

The  debits  are  distinguished  from  the  credits  by  writing  the  former  in 
black  ink  and  the  latter  in  red  ink,  as  above ;  no  inconvenience  being  experi- 
enced through  the  changing  of  pens,  because  all  the  charges  are  entered 
first,  and  afterward,  all  the  credits.  From  this  Ledger  an  itemized  statement 
is  easily  made. 


1078-1082 

DOUBLE    ENTRY    BOOK-KEEPING. 

1078.  Wherever  a  Ledger  of  the  common  form  of  ruling  is  used  for  a 
Sales  Ledger,  that  is,  such  a  form  as  is  illustrated  in  paragraphs  555  to  805  in 
this  book,  fully  one-third  of  the  book  is  wasted,  inasmuch  as  there  is  usually 
not  more  than  one-third  the  number  of  lines  occupied  by  the  credits  as 
by  the  debits.  This  should  be  considered  by  the  business  man,  because, 
virtuall}',  one-half  as  many  such  Ledgers  are  thrown  away  as  are  used  ;  and 
by  the  book-keeper,  because  of  the  inconvenience  experienced  in  subtracting 
the  footing  of  the  credit  side  from  that  of  the  debit  while  the  former  is  so  far 
distant  from  the  latter.  On  a  Ledger  of  the  form  illustrated  on  the  preceding 
page,  wherein  double-account  ruling  is  used,  all  the  space  is  utilized  and  there 
is  no  waste  ;  moreover,  the  footings  of  the  credits  are  in  a  column  adjoining 
those  of  the  debits.     (See  11 13.) 

1079.  The  charge  book-keepers  sometimes  begin  as  early  as  the  fifteenth 
of  the  month  to  make  statements  for  the  coming  "ist."  The  ledger-folios  are 
written  at  the  top  of  such  statements,  and  the  latter  are  kept  in  the  regular 
order  of  these  folios.  Whenever  an  entry  is  made  on  an  account  for  which 
a  statement  has  been  started,  the  items  constituting  the  entr)-  are  at  once 
added  to  that  statement.  Sometimes,  however,  it  is  not  convenient  for  the 
book-keeper  to  immediately  add  the  new  items  to  the  statements,  because  of 
being  obliged  to  dispose  of  the  tickets  as  soon  as  possible:  he  then  makes 
memoranda  of  the  pages  upon  which  such  new  items  have  been  entered. 
Then,  whenever  he  has  no  other  work  to  perform,  he  turns  to  these  pages 
and  adds  the  new  items  to  the  statements.  The  credits  for,  and  footings  of, 
the  statements,  are,  of  course,  deferred  until  the  end  of  the  month,  at  which 
time  the  latter  are  completed  and  sent  to  the  customers. 

1080.  When  a  statement  is  completed,  that  is,  the  balance  thereon 
ascertained,  if  this  balance  agrees  with  the  balance  called  for  on  the  person's 
account  in  the  Ledger,  the  correctness  of  both  statement  and  Ledger  is 
proved,  as  far  as  the  additions  and  subtractions  on  them  are  concerned. 

1081.  When  a  number  of  charge-tickets  are  handed  to  a  charge  book- 
keeper, he  first  arranges  them  in  alphabetical  order,  and  then,  from  his  index, 
writes  the  Ledger  pages  on  the  tickets;  after  which,  he  turns  to  the  pages 
indicated  on  the  tickets  and  posts  the  items  from  the  latter.  Before  copying 
the  items  into  his  Ledger,  he  notices  whether  the  name  on  the  ticket  agrees 
with  the  name  in  the  Ledger.  By  doing  this  he  is  not  so  liable  to  post  an 
entry  to  the  wrong  account  as  he  would  be  were  he  to  turn  from  his  inde.x  to 
his  Ledger  on  taking  up  each  ticket.  He  can  also  save  time  by  thus  placing 
the  pages  on  the  tickets  before  posting.  In  most  houses,  all  charges  are,  after 
they  have  been  entered,  called  back  from  the  tickets  by  one  person,  and 
checked  off  in  the  Ledger  by  another. 

1082.  While  opening  a  Sales  Ledger,  the  accounts  are  placed  therein  in 
alphabetical  order  —  a  certain  space  being  allowed  after  each  of  them  in  which 
to  open,  in  proper  alphabetical  position,  any  new  accounts  which  may  subse- 
quently be  received. 

203 


1U83— 1081 

DOUBLE   ENTRY   BOOK-KEEPING. 


CREDIT   DEPARTMENT. 


1083.  Mdse.  Credit-Tickets. —  Credits  for  goods  returned,  allowances 
for  overcharge,  etc.,  are  entered  on  "  Credit  Tickets,"  which  are  always  printed 
either  on  paper  of  a  different  color  from  that  upon  which  the  sales-tickets  are 
printed,  or  on  paper  of  the  same  color,  but  in  ink  of  a  different  color;  this 
being  for  the  purpose  of  avoiding  confusion  while  entering  the  tickets.  These 
tickets,  like  the  charge-tickets,  pass  through  the  hands  of  several  check  and 
record  clerks  before  they  reach  the  charge  book-keepers.  When  goods  are 
returned  they  must  first  be  identified  as  having  been  sold  from  the  house  ; 
second,  it  must  be  learned  by  whom  the\-  were  sold  ;  third,  from  which  depart- 
ment the}-  were  sold  ;  fourth,  the  particulars  must  be  recorded  on  a  Credit 
Ticket,  which  is,  in  form,  nearly  the  same  as  the  sales-ticket ;  fifth,  the  floor- 
walker of  the  department  from  which  the  goods  were  sold  must  place  the 
initials  of  his  name  on  the  ticket,  to  indicate  that  the  goods  have  been  duly 
received  by  him  ;  sixth,  this  ticket  is  handed  to  the  Credit  Clerk,  who  credits 
the  customer  and  then  charges  the  proper  department  for  the  goods  returned, 
as  so  much  off  the  sales ;  he  also  enters  the  amount  thereof  against  the  clerk 
who  sold  the  goods,  thus  reducing  the  aggregate  of  his  sales  by  so  much ; 
seventh,  the  ticket  is  then  handed  to  the  book-keeper  in  whose  Ledger  is  to 
be  found  the  customer's  account.  The  latter  is  then  credited  for  the  goods 
returned.  After  having  been  duly  entered  in  the  manner  above  described, 
the  credit-tickets  are  arranged  in  alphabetical  order,  made  into  a  package, 
dated,  and  placed  in  the  box  with  the  charge-tickets. 

1084.  Cash  Credit-Tickets.— Credits  for  cash  received  on  customers' 
accounts  are  entered,  first,  on  credit-tickets,  which  are,  in  form,  as  follows : 

credit. 

Amount,  ( 

Name 

Address -. 

Date 

The  names  and  amounts  from  these  credit-tickets  are  then  entered  either 
in  a  Cash  Book  which  has  a  special  column  for  each  Sales  Ledger,  or,  in 
Individual  Cash  Books,  after  the  manner  described  in  1026.  These  credit- 
tickets  are  then  assorted  according  to  Sales  Ledgers  and  passed  to  the  charge 
book-keepers,  who  post  therefrom  direct  to  the  credit  of  the  customers' 
accounts.  In  either  method  each  charge  book-keeper  keeps  a  proof-slip, 
showing  the  separate  amounts  and  the  aggregate  thereof  posted  to  the  credit 
of  his  customers'  accounts  during  the  day.  This  aggregate  must  agree  with 
the  total  of  his  column  in  the  special-column  Cash  Book  under  the  former 
method,  or  with  the  total  of  the  amounts  entered  in  his  Individual  Cash  Book 
under  the  latter  method. 

204 


1085-1089 

DOUBLE   ENTRY   BOOK-KEEPING. 


CHECK  ON  RETAIL  SALES  LEDGERS. 

1085.  After  one  has  been  robbed  of  sa)'  ten  or  twent\-  tliousand  dollars 
through  the  collusion  of  collector  and  book-keeper,  or  of  cashier  and  book- 
keeper, he  is  willing  to  adopt  almost  any  system,  however  expensive  it  may 
be,  which  will  insure  him  against  a  repetition  of  such  an  experience.  A  case 
is  known  where  a  systematic  thievery  was  successfully  carried  on  for  a  num- 
ber of  years  without  detection  and  was  then  discovered  only  by  accident. 
In  this  case,  a  collector  and  a  book-keeper  were  the  "interested  parties." 
In  the  house  where  this  occurred,  they  have  now  established  a  system  by 
which  each  account  in  each  Sales  Ledger  is  verified  on  the  first  of  every 
month.     This  system  may  be  described  as  follows. 

108<>.  All  entries  for  the  Sales  Ledgers  are  made  on  Charge  and  Credit 
tickets,  which  tickets  are  entered,  first,  in  the  checking  department,  where  the 
amounts  only  are  entered;  second,  in  the  charge  department,  where  both  the 
items  and  the  amounts  are  entered  ;  third,  and  finall\-,  again  in  the  checking 
department,  when  the  Ledger-pages  and  the  amounts  are  entered.  These 
tickets  are  entered  thus: 

FIRST,   IN   THE   CHECKING   DEPARTMENT— AMOUNTS   ONLY. 

1087.  Mdse. "Charges.— After  the  Mdse.  charge-tickets  have  passed  the 
Packer,  they  are  sent  to  the  checking  department,  where  they  are  assorted 
according  to  clerk-numbers  and  entered  in  the  Clerks'  Sales  Book  after  the 
manner  described  in  paragraph  io6i.  From  this  book  the  total  of  the  charge 
sales  made  by  each  clerk  is  ascertained,  as  well  as  the  aggregate  charge  sales 
for  all  the  clerks.  The  latter  sum  is  the  total  of  the  Mdse.  charge  sales 
which  should  be  debited  in  the  several  Sales  Ledgers  during  the  day. 

1088.  Cash  Charges. — For  all  cash  paid  to  customers  on  account  of 
goods  returned,  Cash  charge-tickets  are  made  out  by  the  cashier.  These 
tickets  are  first  sent  to  the  checking  department,  where  the  amounts  thereon 
are  entered  in  a  Cash-Check  Hook  in  a  "  Charges  "  column,  without  an}-  regard 
to  the  respective  Ledgers  to  which  they  may  belong.  At  the  close  of  the 
day,  the  total  of  this  column  is  found,  which  is  the  aggregate  Cash  Charges 
which  should  have  been  debited  in  the  several  Sales  Ledgers  during  the  day. 

1089.  Mdse.  Credits.— After  the  Mdse.  credit-tickets  have  passed  the 
Credit  Clerk,  they  are  sent  to  the  checking  department,  where  they  are 
assorted  according  to  clerk-numbers  and  entered  in  a  "Returns"  book.  This 
book  is  kept  for  the  purpose  of  showing  the  total  goods  returned  on  each 
clerk's  sales,  as  well  as  the  aggregate  goods  returned  on  all  the  clerks'  sales. 
The  former  shows  the  amount  to  be  charged  to  the  clerk  as  so  much  off  his. 
gross  sales,  and  the  latter,  the  sum  total  to  be  credited  to  customers  in  the 
several  Sales  Ledgers  as  Mdse.  returned,  being  the  total  Mdse.  Credits. 

205 


1090—1093 

DOUBLE   ENTRY   BOOK-KEEPING. 

1090.  Cash  Credits. — For  all  cash  received  from  customers  on  account, 
Cash  credit-tickets  are  made  out  by  the  cashier.  These  tickets  are  first  sent 
^o  the  checking  department,  where,  without  any  regard  to  the  Sales  Ledgers 
to  which  they  may  belong,  they  are  entered  in  the  Cash-Check  Book  in  a 
"Credits"  column.  At  the  close  of  the  day,  the  total  of  this  column  is  found. 
This  total  is  the  aggregate  amount  which  should  have  been  credited  as  cash 
payments  to  the  customers'  accounts  in  the  several  Sales  Ledgers  during  the 
day,  or  the  total  Cash  Credits. 

1091.  The  object  in  entering  the  amounts  of  the  charge  and  credit 
tickets  in  the  checking  department  first,  is  to  learn  the  original  amounts  on 
the  tickets  before  they  reach  the  book-keepers  in  the  charge  department. 

Where  the  Register-Book  method  is  used,  this  is  rendered  unnecessary ; 
but  only  so  far  as  the  Mdse.  charge-tickets  are  concerned. 

1092.  Cash-Check  Book.— This  book  is  kept  merely  as  a  memorandum 
book  in  which  to  record  the  amounts  of  the  Cash  charge  and  Cash  credit 
tickets  as  they  appear  when  they  come  from  the  cashiers  and  before  they  are 
sent  to  the  charge  book-keepers. 

SECOND,   IN   THE   CHARGE   DEPARTMENT  — ITEMS   AND   AMOUNTS. 

1093.  All  the  Mdse.  and  Cash  charge  and  credit  tickets,  after  having 
been  duly  entered  in  the  checking  department  in  the  manner  described  in  the 
preceding  paragraphs,  are  sent  to  the  charge  department,  where  they  are  first 
assorted  according  to  Sales  Ledgers  and  then  entered  in  the  respective 
Ledgers  to  which  they  belong.  While  being  thus  entered,  the  folios  of  the 
accounts  upon  which  the  entries  are  made  are  written  on  the  tickets. 


206 


1004—1095 


DOUBLE    ENTRY   BOOK-KEEPING. 


THIRD,   IN   THE   CHECKING    DEPARTMENT  —  LEDGERS,   PAGES,  AND   AMOUNTS. 

1094.  Check  Register.— When  the  charge  and  credit  tickets  have  all 
been  entered  in  the  charsje  department,  they  are  sent  back  to  the  checking 
department,  where  they  are  entered,  at  the  close  of  the  day,  in  a 

check  register. 


A  to  G. 


Nov.  JO,  1886. 


Kind  of 
Ticket. 

¥^^ 

Extensions. 

Amount 

CHARGE 

Mdit. 

s 

27 

7S 
35_ 

1 

48 
34 

V 

3M 

20      / 

Cash 

565 
420 

5 

40  !  y 
25 

^1/ 

Transfer 

65s 

37S 

SIS 

S_ 

901^ 

j   CREDIT 

i 

Md,e. 

566 
634 

.3  j  65  1  ^ 

Cash 

=75 

14      80   \/ 

125      40 

.60       25 

.^-ifroN 

»li     1  1  "ilSu 

1095.  These  tickets  having  been  already  assorted  according  to  Sales 
Ledgers  in  the  charge  department,  and  also  the  Ledger  folios  written  on  them, 
they  are  now  assorted  according  to  the  different  kinds  of  tickets,  namely, 
Mdse.  charge,  Mdse.  credit.  Cash  charge,  Cash  credit,  and  Transfer;  after 
which,  they  are  entered  in  this  Check  Register,  thus  : 

Charge.  —  First,  all  those  for  Mdse.  sold,  the  total  being  found  (see 
$314.20);  second,  all  those  for  Cash  paid  to  customers,  the  total  being  found 
(see  $17.65);  third,  all  the  "Charge"  items  on  the  Transfer  tickets,  the  total 
being  found,  (see  $220.90).     Then,  the 

Credit.— First,  all  those  for  Mdse.  returned,  the  total  being  found  (see 
$13.65);  second,  all  those  for  Cash  received  from  customers,  the  total  being 
found  (sec  $300.45);  third,  all  the  "Credit"  items  on  the  Transfer  tickets,  the 
total  being  found  (see  $220. go). 


207 


1096-1100 


DOUBLE   ENTRY    BOOK-KEEPING. 


1096.  "Extensions"  Column. — When  there  are  several  tickets  bearing 
the  same  ledger-foHo,  the  amount  of  each  ticket  is  entered  in  the  "Extensions" 
column  and  the  total  extended  into  the  "Amount"  column.  For  example,  see 
$12.75,  $27-35-  antl  $40.10  in  the  preceding  form.  This  is  for  the  purpose  of 
saving  space  in  the  Proof  Ledger  when  posting  to  that  book. 

1097.  The  totals  in  this  Check  Register  are  written  in  red  ink,  so  as  to 
distinguish  them  from  the  amounts  that  were  entered  from  the  tickets.  The 
black-ink  amounts  are  posted  to  a  Proof  Ledger  ;  the  red-ink,  to  the  Summary. 

It  is  understood,  of  course,  that  such  a  statement  as  the  preceding  one  is 
made  for  each  Sales  Ledger. 

1098.  Transfer  Tickets. — Whenever  an  account  in  a  Sales  Ledger  is 
transferred  from  an  old  page  to  a  new  one,  or  an  amount  is  transferred  from 
one  account  to  another  in  the  same  book,  a  transfer  ticket  is  made  by  the 
book-keeper  thus,  for  example  : 


C655, 
654, 


$215. 
215. 


Whenever  an  amount  has  been  posted  into  the  wrong  Ledger  and  is  there- 
after transferred  to  the  right  Ledger,  a  transfer-ticket  is  made  thus,  for 
example  : 


Charge  A  to  G  375, 
Credit    H  to  N ^tS,, 


$5.60 
5.60 


(For  illustration  of  both  the  above  examples,  see  entries  in  preceding  form 
under  ''Charge  Transfer,"  and  under  '-Credit  Transfer.")  The  debit  and  credit 
Transfer  totals  in  the  Check  Register  should  always  agree. 

1099.  Check  Register  Summary.— Immediately  after  the  last  Ledger 
statement  in  the  Check  Register,  the  totals  of  all  the  Ledger  statements  are 

summarized  thus : 

SUMMARY. 

Nov.  JO,  1886. 


^ 

1    .„. 

Mdse. 
Charges. 

Cash 
Charges. 

Transfer      1 
Charges. 

Mdse. 
Credits. 

Cash 
Credits. 

Transfer 
Credits. 

A  to  G 

314 

20 

jy 

6S 

«o 

90 

'3 

65 

300 

45 

aao 

90 

H  to  N 

36s 

49 

14 

20 

65 

40 

.a 

30 

1             .45 

60 

6s 

40 

1     0  .0  Z 

4'7 
1107 

34 

5 

V 

80 

15 

26 

45 

1             41a 

75 
80 

80 

»S 

1       Total 

37 

35 

366 

45 

S» 

]             858 

366 

45 

This  Summary  is  made  up  from  the  red-ink  footings  in  the  Check  Register, 
as  will  be  seen  by  comparing  the  amounts  in  the  above  form  with  the  red-ink 
amounts  in  the  form  preceding  this. 

1100.  After  the  footings  for  each  Sales  Ledger  have  been  transferred 
from  the  Check  Register  to  the  Summary,  the  totals  of  each  of  the  different 
kinds  of  charges,  and  of  credits,  in  the  Summary  are  found.  The  total  of  the 
"Mdse.  Charges"  column  must  agree  with  the  aggregate  of  the  clerks'  charge 
sales  in  the  Clerks'  Sales  Book  — see  1090;  the  total  of  the  "Cash  Charges" 


208 


1101-1102 

DOUbLE   ENTRY   BOOK-KEEPING. 

column  must  agree  with  the  total  of  the  "Charges"  column  in  the  Cash-Check 
Book  —  see  1091;  the  total  of  the  "Mdse.  Credits"  column  must  agree  with  the 
aggregate  of  the  clerks'  "returns"  in  the  "Returns"  book  —  see  1092;  the 
total  of  the  "Cash  Credits"  column  must  agree  with  the  total  of  the  "Credits" 
column  in  the  Cash-Check  Book  — see  1093.  If  any  of  these  totals  do  not 
agree,  the  amount  on  some  ticket  has  been  changed,  some  ticket  is  missing,  or 
there  has  been  a  mistake  made  in  some  addition.  To  locate  this  difference, 
the  amounts  in  the  several  statements  in  the  Check  Register  are  called  off  and 
the  figures  in  the  original  book  of  entry  (whichever  it  may  be)  are  checked. 

The  totals  of  the  "Transfer  Charges"  and  "Transfer  Credits"  columns 
must  agree  with  each  other. 

1101.  Thus  it  will  be  seen  that  by  this  method  it  is  proved  whether  any 
of  the  original  amounts  on  the  tickets  have  been  changed,  as  well  as  whether 
every  ticket  which  was  first  received  in  the  checking  department  and  then 
sent  to  the  charge  department  is,  finally,  received  again  in  the  checking 
department.  It  will  also  be  seen  tliat  the  manner  in  which  this  is  proved  is  as 
follows : 

(i)  the  total  of  each,  Mdse.  and  Cash  charge,  and  of  each,  Mdse.  and  Cash 
credit,  was  ascertained  before  the  tickets  were  sent  to  the  charge  department 
—  that  is,  before  they  were  assorted  according  to,  and  entered  in,  the  Sales 
Ledgers  ; 

(2)  the  total  of  each,  Mdse.  and  Cash  charge,  and  of  each,  Mdse.  and  Cash 
credit,  is  ascertained  after  the  tickets  ha\e  been  returned  from  the  charge 
department  —  that  is,  after  they  have  been  assorted  according  to,  and  entered 
in,  the  Sales  Ledgers ;  _ 

(3)  the  totals  as  ascertained  in  "2"  (above)  must  agree  with  their  corre- 
sponding totals  in  "  i." 

It  is  also  proved  by  this  method  whether  all  the  footings  in  the  Clerks' 
Sales  Book,  the  Cash-Check  Book,  the  Check  Register,  the  Returns,  and  the 
Summary  arc  correct. 

llOi.  Proof  Ledger.— Directly  from  the  Check  Register,  the  black-ink 
items  in  the  "Amount"  column  are  posted  into  a  Proof  Ledger.  A  Proof 
Ledger  is  kept  in  the  checking  department  for  each  Sales  Ledger  kept  in  the 
charge  department.  The  object  in  keeping  these  I'r^of  Ledgers,  is  to  ascer- 
tain in  the  checking  department  what  the  debit  and  credit  footings  and  the 
balance  of  each  account  in  each  Sales  Ledger  should  be  :  tluis  putting  a  check 
against  any  book-keeper's  tam]:)ering  with  an  account  \\  ithouL  liiat  fact  being 
discovered  in  the  checking  department  at  the  end  of  the  month,  when  the 
balances  in  each  Sales  Ledger  are  compared  with  those  in  its  corresjionding 
Proof  Ledger.  The  accounts  in  the  Proof  Ledgers  are  headed  with  the  pages 
only,  and  not  with  the  names  of  the  customers,  as  they  are  in  the  Sales 
Ledgers.  In  this  system  there  must,  of  course,  be  only  one  account  on  a  page 
in  the  Sales  Ledgers. 

209 


1103—1105 


DOUBLE    ENTRY    BOOK-KEEPING. 


In  the  Proof  Ledgers  there  may  be  as  many  as  nine,  or  even  twelve, 
accounts  on  a  page,  for  the  following  reasons:  (ij  that  in  the  Proof  Ledgers 
no  space  is  required  for  explanations;  (2)  the  horizontal  lines  may  be  ruled 
one-quarter  of  an  inch  apart,  thus  admitting  of  more  lines  on  a  page  ;  (3)  only 
the  total  amount  of  a  customer's  purchases  for  the  day  is  posted  into  this  book, 
while  sometimes  as  many  as  twenty-five  lines  are  required  in  the  Sales  Ledger 
upon  which  to  record  the  items  constituting  that  purchase  —  all  the  amounts 
of  such  items  being  entered  in  the  "  Extensions"  column  in  the  Check  Register 
And  the  total  thereof  extended  into  the  "Amount"  column,  which  total  is  the 
amount  posted  to  the 


PROOF   LEDGER. 


A  to  G. 


Date 

Debit. 

1S86      : 

Oct.          5 

32     =5 

14 

26  1    4C 

IS 

1        ! 

!  ..1. 

Nov. 

30 

A   f 

«s 

40  II  Cr. 


Only  two  accounts  are  illustrated  above,  though,  as  previously  stated, 
there  may  be  as  many  as  nine  or  twelve  on  a  single  page.  The  items  under 
date  of  Nov.  30  in  these  two  accounts  are  posted  from  the  examples  given  in 
the  Check  Register,  as  will  be  seen  by  reference  to  that  form.     (See  1094.) 

1103.  Whenever  the  total  of  the  debit  column  exceeds  that  of  the  credit 
column,  the  difference  is  a  dedii  balance  and  is  written  in  the  "Balance" 
column,  with  nothing  preceding  the  amount  to  indicate  that  it  is  a  debit 
balance,  for  such  it  is  understood  to  be.     (See  $47-65  under  "566"  above.) 

1104.  Whenever  the  total  of  a  credit  column  is  greater  than  that  of  a 
debit  column,  the  difference  between  these  totals  is  a  credit  balance  and  is 
written  in  the  "Balance"  column  —  preceded  by  "Cr.,"  to  indicate  that  it  is  a 
credit  balance.  (See  $5.40  under  "565"  above.)  The  balances  are  written  in 
pencil  so  that  they  may  be  changed  if  found  incorrect. 

1105.  At  the  end  of  each  month  the  balances  in  this  Proof  Ledger  are 
compared  with  the  balances  in  its  corresponding  Sales  Ledger,  the  person 
who  kept  the  latter  book  taking  no  part  whatever  in  the  examination  thereof 
If  all  these  balances  agree,  it  is  proved  that  all  the  accounts  in  the  Sales 
Ledger  are  both  honest  and  correct.  If,  on  the  other  hand,  any  of  these 
balances  do  not  agree,  the  entries  in  these  two  books  are  then  compared,  and 
the  discrepancy  discovered.  If  it  is  an  error,  it  will  be  corrected ;  if  a 
"shortage,"  the  book-keeper  will  be  called  upon  for  an  explanation.  In  order 
to  make  the  discovery  of  any  peculations  even  more  probable,  not  only  the 


1106-1110 

IJOUBLE    KNTKV    BOOK-KKKPING. 

"balances"  but  also  the  debit  and  credit  totals  may  be  called  off,  when  thus 
comparing  the  accounts  in  the  Sales  Ledgers  with  those  in  the  Proof  Ledgers. 

1106.  It  is  a  good  plan  to  occasionally,  and  at  unexpected  moments, 
change  the  book-keepers  around  from  the  Ledgers  they  have  been  working 
on  to  other  Ledgers;  that  is,  for  instance,  to  change  the  book-keeper  who 
has  been  working  on  A— D  to  N— R,  N— R  to  E— H,  E— H  to  A-  -D,  and  so 
on.  When  this  practice  is  adopted,  all  the  book-keepers  in  the  house  must 
collectively  be  either  honest  or  dishonest,  for  each  book-keeper  thus  becomes 
constituted  a  detective  over  his  fellow  book-keepers,  and  the  firm  would 
ascertain  whether  any  of  the  accounts  were  "crooked"  when,  on  the  first  of 
th'e  month,  the  statements  were  sent  to  the  customers.  Of  course  the  ques- 
tions of  diversity  in  the  hand-writing  and  of  unacquaintance  with  the  accounts 
arise,  but  they  are  of  small  importance  when  that  greater  question  of  avoiding 
loss  through  theft  is  under  consideration. 

1107.  When  one  does  not  wish  to  change  the  book-keepers  around  in 
the  manner  above  suggested  for  the  keeping  of  the  Ledgers,  it  is  a  good  plan 
to  thus  change  them  for,  at  least,  the  taking  of  the  balances  on  the  first  of 
each  month. 

1108.  It  is  likewise  a  good  plan  to  occasionally  change  tlie  collectors 
from  one  route  to  another,  and  at  times  when,  such  changes  are  least  expected 
to  be  made. 

1109.  But,  to  sum  up,  no  sensible  man  will  claim  that  he  has  a  system 
which  is  absolutely  and  positively  a  check  against  falsification  ;  for  there  is 
no  method  which  will  keep  a  cunning,  scheming  thief  from  stealing.  It  is  a 
well-known  fact  that  in  those  houses  where  they  have  the  best  systems  and 
surest  safeguards  against  thievery,  the  largest  defalcations  have  occurred. 
However,  the  more  excellent  the  system,  the  more  expert  must  be  the  thief. 

Finally,  no  system  should  be  trusted  implicitly,  for  it  is  in  those  houses 
where  they  are  known  to  place  implicit  trust  in  their  systems  of  book-keeping 
that  the  most  expert  thieves  strive  to  obtain  employment ;  knowing,  as  they 
do  kuqAv,  that  there  they  may,  eventually,  discover  a  way  to  surmount  the 
obstacles  which  have  been  thrown  in  their  path,  when  they  may  "put  money 
in  their  purses"  with  less  fear  of  being  suspected,  and  in  spite  of  the  supposed 
infallible  system. 

1110.  Check  Analysis. — In  order  to  ascertain  the  total  of  each,  and  of 
all,  Mdse.,  Cash,  and  Transfer  charges,  and  of  each,  and  of  all,  Mdse.,  Cash, 
and  Transfer  credits  which  should  have  been  posted  into  each  Sales  Ledger 
during  the  month,  as  likewise  what  the  debit  balance  of  each  Sales  Ledger, 
and  consequently  of  each  Proof  Ledger,  should  be  —  a  Check  Analysis  is  kept 
in  the  checking  department.     The  following  is  the  form  of  this  book : 


1110 


DOUBLE   ENTRY   BOOK-KEEPING. 


A   to   G. 


liALANCB. 

41.520 

54 

20,025 

30 

6'.54S 

8+ 

■8.275 

2* 

43.270 

60 

1 

As  will  be  seen  by  referring  to  the  form  under  1099,  the  amounts  entered 
in  this  Check  Analysis  are  those  which  are  found  in  the  Summaries  of  the 
Check  Register,  and  they  are  posted  hereto  daily.  In  the  above  illustration 
only  the  amounts  of  one  day's  entries  are  given  (Nov.  30th),  the  aggregate  of 
the  previous  days  in  the  month  being  supposed  to  make  up  the  amounts  on 
the  "Totar  line. 

The  aggregate  of  the  Mdse.,  Cash,  and  Transfer  charges  is  daily  extended 
into  the  "Total  Charges"  column,  and  the  aggregate  of  the  jMdse.,  Cash,  and 
Transfer  credits  is  daily  extended  into  the  "Total  Credits"  column. 

At  the  beginning  of  each  Check  Analysis  statement  (there  is  one  such 
statement,  of  course,  for  each  Sales  Ledger),  the  debit  balance  of  the  Ledger, 
as  shown  in  the  statement  of  the  preceding  month,  is  brought  forward  and 
extended  into  the  "Balance"  column.  (See  $41,520.54.)  At  the  end  of  the 
month  the  footing  of  the  "Total  Charges"  column  is  found,  extended  into 
the  "Balance"  column,  and  added  to  the  balance  brought  forward  at  the  top 
of  the  column;  the  total  thus  found  is  the  "gross  debit."  (See  $61,545.84.) 
The  footing  of  the  "Total  Credits"  column  is  then  found  and  deducted  from 
the  "gross  debit,"  which  gives  the  "net  debit ;"  or,  the  debit  balance. 

The  footing  of  the  "Total  Charges"  column,  as  likewise  the  footing  of  the 
"  Total  Credits"  column,  should  agree  with  the  aggregate  footings  of  the  three 
columns  preceding  each. 

After  the  amounts  have  been  entered  in  this  book  for  the  close  of  a  day's 
business,  the  debit  balance  of  the  Sales  Ledger  can  be  ascertained  in  a  few 
minutes,  thus:  first,  find  the  footing  of  the  "Total  Charges"  column  and  add 
that  to  the  old  balance  brought  forward  at  the  top  of  the  "Balance"  column, 
which  sum  thus  found  is  the  "gross  debit"  up  to  that  time'  then,  find  the 


nil 


DOUBLE   ENTRY   BOOK-KEEPING. 


■ 

^J^ 

Cash 
Ctediti. 

^'^"l!S 

J.V.'Ss.- 

'3 

65 

3CO      45 

no 

90 

535      — 

360 

75  II                >6.7S3|    79 

1.190 

18,275  1    «4 

_ 

footing  of  the  "Total  Credits"  column  and  subtract  that  from  the  "gross 
debit."     The  remainder  thus  found  will  be  the  debit  balance  of  that  Ledger. 

In  order  to  ascertain  the  aggregate  debit  balance  of  all  the  Sales  Ledgers, 
it  is  only  necessary,  of  course,  to  add  together  their  respective  debit  balances., 

nil.  Check  Analysis  Summary.— A  summary  of  the  amounts  on  the 
''Total"  /ines  in  the  Check  Analysis  statements  may  be  made  immediately 
after  the  last  statement,  in  the  same  manner  as  the  summary  in  the  Check 
Register  is  made.  (See  1099.)  While  the  Check  Register  shows  the  results 
of  the  daj/'s  entries  in  the  Sales  Ledgers,  the  Check  Analysis  Summary  shows 
the  results  of  the  montlis  entries  therein  —  both  for  each  Ledger  separately, 
as  well  as  for  all  the  Ledgers  combined. 


213 


112 


DOUBLE    EXTRV    BOOK-KEEPING. 


VARIOUS  FORMS  OF  LEDGER-RULINGS. 


1112. 

DOUBLE-ACCOUNT    BALANCE-LEDGER. 
THEO.  KOEHLER,  STEINWAY,  N.  Y. 

1 

Date. 

Explanation.        1    Folio. 

Debit. 

Credit 

BaUnce.           | 

IJov. 

3 
4 
S 

i 

25 

30 

Bal.                                 4,0 

=14  ■ 
21S 
226 
37° 
,       =44 
393 

-            1 
250,- 

25     60 
160     at 
3.8     45 
176     - 

150 

- 

2SO 

275 

395 
555 
455 

624 
800 

60 
60 
80 
80 

=5 

The  above  is  the  form  of  a  Sales  Ledger  vvhicli  is  used  to  show  continu- 
ously, that  is,  from  entry  to  entry,  the  balances  on  the  customers'  accounts. 
Whenever  an  entry  is  made,  the  balance  (including  that  entry)  is  written  in 
the  "Balance"  column.  If  the  amount  entered  increases  the  old  balance,  it  is 
added  thereto;  if  it  decreases  the  old  balance,  it  is  subtracted  therefrom  — 
thus,  always  showing  on  the  line  with  the  last  entry,  the  present  balance,  or 
difference  between  the  debit  and  credit  sides,  of  the  account.  This  certainly 
adds  somewhat  to  the  labor  of  posting,  but  then  many  book-keepers  would 
prefer  doing  a  little  e.xtra  work  during  the  month  if  thereby  they  could  cur- 
tail the  labor  of  taking  off  their  "balances"  at  the  end  of  the  month.  When 
this  method  is  adopted,  all  that  the  book-keeper  has  to  do  at  the  end  of  the 
month  in  order  to  take  off  his  "balance,"  is  to  go  through  his  Ledger  and 
take  into  his  "balance  book"  the  last  amount  in  the  "Balance"  column  of 
each  account  —  thus  avoiding  the  adding  and  subtracting  which  is  required  to 
be  done  at  the  end  of  every  month  in  the  old  form  of  Ledger.  Further,  the 
"balance"  can  as  easily,  and  as  quickl)-,  be  taken  off  on  one  day  of  the  month 
as  on  another;  therefore,  it  may  be  taken,  say,  on  the  15th  of  every  month. 
In  this  wa\-,  that  part  of  the  work  which  would  otherwise  come  at  the  end  of 
the  month  to  interfere,  or  clash  with,  the  sending  off  of  the  statements  is 
shifted  to  the  middle  of  the  month.  Thus,  the  book-keeper's  work  does  not, 
at  the  end  of  every  month,  come  down  upon  him  like  an  avalanche,  but,  like 
the  mellow  sunshine  of  an  Indian  Summer,  it  falls  upon  him  gently.  Further 
still,  some  houses  require  all  mail  orders  to  be  passed  through  the  credit-office 
before  they  are  filled,  and,  in  order  that  the  credit-man  may  be  the  better 
qualified  to  judge  wisely  as  to  whetlier  a  customer  is  entitled  to  credit,  it  is 


2:4 


lli:j-llU 

DOUISLK    ENTRY    BOOK-KEEPING. 

necessary  for  him  to  know  how  much  the  customer  is  owing.  It  is  then 
required  of  the  book-keeper  to  write  upon  tlie  order  the  balance  of  the  cus- 
tomer's account,  which,  with  this  form  of  Ledger,  is  quickly  done,  for  the 
amount  may  be  seen  at  a  glance  in  the  "  Balance  "  column.    If  any  part  of  this  « 

balance  is  past  due,  the  book-keeper  also  notes  that  on  the  order.  And 
again,  when  the  statements  are  made  out  at  the  end  of  the  month,  the  amounts 
thereon  need  be  footed  only  once,  if  their  balances  agree  with  those  in  the 
Ledger. 

This  form  of  Ledger  is  similar  (in  its  effect)  to  the  Ledger  kept  in  banks 
for  their  depositors'  accounts,  because  in  that  the  daily  balance  of  each  account 
is  shown. 

1113.  The  other  features  of  this  form  which  invite  attention  are  as 
follows:  (l)  the  debit  and  credit  columns  are  adjoining  each  other,  conse- 
quently, the  difference  between  the  footings  thereof  is  more  easily  and  con- 
veniently found  than  it  would  be  were  they  farther  removed  from  each  other, 
as  in  the  old  form  of  Ledger,  where,  for  example,  the  footing  of  the  credit 
column  will  be  at  the  top  of  the  right-hand  side  of  the  page,  while  that  of 
the  debit  column  will  be  at  the  bottom  of  the  left-hand  side  of  the  page  ; 
(2)  when  an  account  is  to  be  balanced,  only  these  adjoining  money-columns 
need  be  ruled  across,  therefore  it  may  be  more  quickly  closed  than  could  an 
account  in  the  old  form  of  Ledger;  (3)  time  is  also  saved  in  the  writing  of 
the  "month"  and  "year,"  for  in  the  old  form  it  is  necessary  to  write  them 
twice  —  once  for  each  side  of  the  account  —  whereas,  in  this  form,  one  writing 
answers  for  both  the  debit  and  the  credit ;  (4)  in  this  form  of  ruling  a  book 
with  a  leaf  only  10^x16  inches  (Demy  size),  will  admit  of  double-account 
ruling,  or  two  accounts  side  by  side  on  a  page,  with  an  "Explanation"  column 
in  each,  three-quarters  of  an  inch  wide,  this  being  quite  enough  space  in  which 
to  write  any  Sales-Ledger  explanation  ;  therefore,  wherever  the  old  or  com- 
mon form  of  Ledger,  with  single-account  ruling  is  used  (such  as  555  to  562 
in  this  book),  and  where  a  leaf  of  this  Ledger  measures  as  much  as  lojx  16 
inches,  and  where  there  is  not  more  than  one  credit  entry  to  every  six  debit 
entries,  forty-one  per  cent,  of  the  money  expended  for  Ledgers  is  wasted; 
that  is,  a  700- page  book  of  this  form  (the  new)  will  last  as  long  as  a  1200-page 
book  of  the  common  form  (the  old);  or,  a  Ledger  costing  $7  in  the  new  form 
of  ruling  would  last  as  long  as  one  costing  $12  in  the  old  form  — thus,  by 
using  this  new  form,  $5  would  be  saved  in  the  cost  of  the  book  ;  (5)  and 
finally,  in  order  to  have  a  double-account  ruling  in  the  old  form  of  Ledger,  a 
book  of  much  larger  dimensions  is  required—with  a  leaf  at  least  16x20  inches 
— which  greatly  increases  not  only  the  cost  and  the  weight  of  the  book,  but 
also  the  space  required  on  the  book-keeper's  desk. 

1114.  The  additions  and  subtractions  in  this  Balance  Ledger  may  be 
proved  by  casting  the  9's  first  out  of  the  two  smaller  amounts,  noting  the 
number  that  remains,  and  then  out  of  the  larger  amount,  also  noting  the  num- 
ber that  remains.    If  these  remainders  agree,  the  addition,  or  the  subtraction, 

215 


1115-1116 


DOUBLE   ENTRY   BOOK-KEEPING. 


as  the  case  may  be,  is  proved  to  be  correct.    For  example,  see  preceding  form: 
old  balance  $250  +  debit  $25.60  =  new  balance  $273.60. 


Two  small tr  amounts —  $250,  $25.60 

2  5 

5  6 


inder. 


Another   example:    old    balance,  $555.80  — credit,  $100  =  new  balance, 
$455.80. 


—  Sioo,  $455.80  Larger  c 

5 
5     remainder.  5 


.;/- $555.80 
5     remainder. 


(See  paragraphs  911  and  912.) 

The  debit  balances  are  written  in  this  Ledger  in  black  ink.  Whenever 
there  is  a  credit  balance  on  an  account,  it  may  be  written  either  in  black  ink 
preceded  by  "Cr.,"  or  in  red  ink  with  the  "Cr."  omitted. 

1115.  If  the  "Balance"  column  in  this  new  form  be  omitted,  a  book  of 
still  smaller  dimensions  — leaf  8^xi4inches,  Cap  size— will  admit  of  a  double- 
account  ruling.  This  book,  although  it  would  then  not  be  a  Balance  Ledger, 
would  possess  all  the  advantageous  features  enumerated  in  paragraph  11 13. 


DOUBLE-ACCOUNT 

REVERSE-LEDGER. 

1116. 

Wm.  T.  Shannon  &  Son,  Pittsburg,  Pa. 

Sharpless  Bros.,  Philadelphia,  Pa. 

Debit. 

Credit. 

..,. 

y^ 

Expl. 

Debit. 

Credit 

Date. 

klio 

ExpL 

1886 

1886 

186 

2Q 

Nov. 

212 

3" 

8s 

OcL 

s8 

376 

« 

60 

8 

224 

.1? 

J! 

30 

384 

><»•» 

83 

5° 
75 

25 

so 

29 

250 
416 

,.,.. 

?5? 

30 

363 

30 

Nov. 

3 

7 
1 

396 
140 
420 



In  the  above  form  the  general  order  of  ledger-ruling  is  reversed.  When 
posting,  that  which  is  of  most  importance  should  be  written  in  the  Ledger 
first,  that  next  in  importance,  next,  and  so  on.  Then  the  order  of  posting 
would  be  thus:  amount,  date,  folio,  explanation.  Many  book-keepers  post 
in  this  order  in  the  old  form  of  Ledger,  but  when  doing  so  have  to  make  two 
or  three  right-and-left  motions  of  the  arm,  while  if  this  form  of  ruling  were 


^16 


1117-1118 


DOUBLE    ENTRY   BOOK-KEEPING. 


used,  the  posting  could  be  completed  in  one  sweep  of  the  arm  to  the  right  — 
the  columns  being  arranged  in  the  order  in  which  the  posting  is  done.  The 
balances,  at  the  end  of  the  month,  are  written  in  pencil  in  the  "Kxplanation" 
column. 

This  form  of  Ledger  also  possesses  all  the  advantageous  features  men- 
tioned in  paragraph  1113. 

1117.  Many  incorrect  postings  are  occasioned  by  carrying  the  date  and 
folio  figures  to  the  Ledger  together  with  the  amount  figures.  Therefore,  it  is 
here  suggested  that  the  book-keeper  place  on  his  desk  in  front  of  him,  in  a 
slanting  position,  a  figuring-block,  and  write  thereon  with  a  blue  pencil  in 
large  figures  the  date  and  number  of  the  folio  from  which  he  is  posting  — 
then,  when  posting  an  item  to  the  Ledger  to  burden  the  mind  with  only  the 
name  of  the  account  and  the  amount.  His  liability  to  get  the  figures  in  the 
amount  transposed,  or  otherwise  "mixed  up,"  will  then  be  greatly  diminished. 
After  he  has  posted  the  amount,  if  it  be  necessary  for  him  to  refresh  his 
memory  as  to  the  date  and  folio,  he  may  do  so  by  raising  his  eyes  to  the  large 
figures  on  the  figuring-block  before  him,  where  he  will  see  the  figures  which 
he  must  write  to  complete  the  posting. 

LEDGER  WITH  TRANSPOSED  CREDIT  COLUMN. 

1118.  JOHN  V.  FARWELL  &  CO.,  CHICAGO,  ILLS. 


Date. 

Expl 

Folio. 

Debit. 

Credit 

D.«e. 

Folio. 

ExpL 

.r 

w 

.„ 

SH 

s,? 

514 

'5 

1886 
Dec 

4 

38s 
43' 

BU. 

130 

4S 

60 

8 

436 

72 

65 

II 

44° 

no 

30 

'3 

44a 

The  features  of  this  book  are  the  same  as  those  described  in  paragraph 
I113  under  "i"  and  "2"  therein.  This  style  of  Ledger  will  not  admit  of 
double-account  ruling  unless  the  book  be  large,  that  is,  with  a  leaf  at  least 
16x20  inches. 


217 


1119 


DOUBLE   ENTRY   BOOK-KEEPING. 


BANK   BALANCE-LEDGER. 


1119. 


December.  iSSb. 

1 

2 

3 

Debit. 

CdU. 

Debit.       II      Credit 

Debit.       ||    .Credit 

Adams,  G.  W.  &  Co. 

45 
40 

100 

550 
250 

— 

225 

60  Ij       ^^ 

'! 

■' 

1        4.2 

.87 

Anderson.  J.  F. 

150 

The  above  is  the  form  of  a  Ledger  which  is  used  in  banks  in  which  to  keep 
their  depositors'  accounts.  The  figures  "i,"  "2,"  and  "3"  at  the  top  of  the 
double  money-columns  represent,  for  example,  the  1st,  2d,  and  3d  days  of  the 
month.  The  "month"  and  "year"  are  written  in  the  left-hand  margin  at 
the  top  of  the  page.  There  are  six  double  —  that  is,  debit  and  credit  — 
money-columns  on  a  page,  and  these  represent  the  six  business  days  of  the 
week ;  therefore,  the  day  of  the  month  upon  which  Monday  falls,  is  always 
written  in  the  first  column,  that  of  Tuesday,  in  the  second  column,  and  so  on 
throughout  the  week.  Whenever  a  Ledger  is  made  for  the  bank,  it  is  calcu- 
lated to  last  a  certain  number  of  weeks  or  months ;  the  names  of  the  depos- 
itors are  arranged  in  alphabetical  order,  and  printed  in  the  left-hand  margin 
of  each  page  of  the  book.  The  same  names  are  printed  on  the  right-hand 
page  as  on  the  left-hand  page ;  thus  the  double  folio  lasts  two  weeks,  at  the 
expiration  of  which  the  balances  from  the  last  column  on  the  right-hand  page 
are  transferred  to  a  new  page.  Consequently,  every  two  weeks  the  balances 
of  all  the  depositors'  accounts  are  transferred  or  carried  forward  to  a  set  of 
new  pages.  If  there  are  one  thousand  such  accounts  in  a  Ledger  and  twenty 
on  a  page,  the  book  would  be  filled  at  the  rate  of  fifty  pages  every  two  weeks, 
so  that  a  twelve-hundred  page  book  would  last  just  six  months.  When  the 
Ledger  is  printed,  a  number  of  lines  arc  left  after  each  letter  in  which  to  write 
the  names  of  any  new  depositors  who  may  open  accounts  with  the  bank. 

The  credits  for  deposits,  discounts,  and  collections  are  entered  in  the 
"Credit"  column  ;  the  charges  for  depositors'  checks  drawn  on  and  notes  paid 
by  the  bank  are  entered  in  the  "Debit"  column.  At  the  close  of  the  day,  the 
difference  between  the  debit  and  credit  columns  in  each  depositor's  account 
— the  balance — is  extended  into  its  proper  column  for  the  next  day:  if  a  debit 
balance,  into  the  "Debit"  column;  if  a  credit  balance,  into  the  "Credit" 
column — the  balance  thus  extended  being  written  in  red  ink  and  immediately 


!l8 


DOUBLE   ENTRY   BOOK-KEEI'ING. 

under  the  heavy  line  which  separates  this  account  from  the  account  above  it. 
The  object  in  writing  the  balances  in  this  position  is  in  order  to  afford  as 
much  space  as  possible  in  which  to  make  the  entries;  the  object  in  writing 
them  in  red  ink  is  that  they  may  be  distinguished  from  the  regular  entries. 
In  a  large  city  where  there  is  a  clearing-house,  the  entries  from  the  bank's 
checks  which  come  through  it  are  made  in  ink  of  a  different  color  from  that 
which  is  used  in  entering  the  checks  which  are  presented  directly  to  and  paid 
by  the  bank.  The  cre'dits  for  deposits  and  the  debits  for  checks  are  made 
direct  from  the  deposit-slips  and  checks  respectively. 

The  method  of  making  the  entries  and  proving  the  work  is  precisely  on 
the  same  plan  as  that  described  in  paragraphs  1087  to  IC97.  A  Cash  Credit- 
Book  is  kept  in  the  Receiving  Teller's  department  and  a  Cash  Debit-Book  is 
kept  in  the  Paying  Teller's  department  —  in  which  books  are  entered  respect- 
ively the  credits  and  debits  to  depositors,  and  in  which  is  ascertained 
respectively  how  much  should  be  credited  and  how  much  should  be  debited 
during  each  day  in  all  the  Balance  Ledgers  combined. 

At  the  close  of  each  day  the  credit  balance  of  each  Ledger  ma\-  be  ascer- 
tained by  footing  the  amounts  which  are  extended  into  the  next  day's  debit 
and  credit  columns,  and  subtracting  the  sum  total  of  the  former  from  that  of 
the  latter. 

Each  side  of  the  Ledger  may  be  proved  independently  of  the  other  side, 
thus: 

Yesterday's  footing  of  Credit  Balances  in  to-day's  column  was  $550.25 

To-day's  total  credits — taken  from  Check  Register  400.00 

"         footing  of  to-day's  "Credit  "  column  j^t^wWi^ir  •  95025 


Yesterday's  footing  of  Debit  Balances  in  today's  column  was  S  42.20 

To-day's  total  debits  —  taken  from  Check  Register  212,20 

"        footing  of  to-day's  "  Debit "  column  j-Ack/i/ //If  25440        25440 


"         Credit  Balance  should  be  $695.85 

(For  figures  above  used,  refer  to  the  1st  and  2d  of  the  month  in  the  pre- 
ceding form.) 

The  correctness  of  the  figuring  done  on  each  page  may  be  proved  by 
finding  first  the  difference  between  the  footings  of  to-day  s  debit  and  credit 
columns  (including  the  balances,  of  course),  and  then,  the  difference  between 
the  footings  of  the  amounts  extended  into  to-morrow  s  debit  and  credit 
columns,  which  latter  footings  consist,  of  cour.sc,  of  the  balances  only.  For 
example : 

Footings  of  to-day's  Credit  column,  $950.25  ;    of  to-morrow's,    $708.05 
"  "         Debit         "  254  40;  "  12.20 

Credit  Balance,  $695.85  $695.85 

If  these  "balances"  agree,  as  they  do  above,  the  additions  and  subtrac- 
tions are  all  proved  to  be  correct. 


1120 

DOUBLE   ENTRY   BOOK-KEEPING. 


ON  PROVING  THE  LEDGER. 

1120.  Each  side  of  the  Ledger  may  be  proved  independently  of  the 
other  by  the  following  described  method:  (ij  rule  off  and  close  up  all 
accounts  which  balance;  (2)  take  a  trial-balance  of  the  footings  —  not  the 
balances  —  of  all  the  unclosed  accounts  ip  the  Ledger,  the  sum  total  of  which 
footings  must,  of  course,  agree  with  each  other;  (3)  open  a  "Proof  Account" 
in  the  Ledger,  and  debit  and  credit  it  for  the  respective  debit  and  credit 
footings  of  the  trial-balance ;  (4)  at  the  end  of  the  month,  post  to  the  debit 
side  of  this  Proof  account,  the  footings  of  the  credit  columns  in  all  the  books 
from  which  you  have  been  posting ;  as  likewise  to  the  credit  side  thereof,  the 
footings  of  the  debit  columns  in  all  the  books  from  which  you  have  been 
posting;  (5)  then,  find  the  footing  of  each  side  of  this  account,  and  if  these 
footings  agree,  the  footings  of  all  the  columns  in  the  books  from  which  the 
postings  were  made  are  proved  to  be  correct ;  if  the  Proof  account  footings 
do  not  agree,  an  error  has  been  made,  to  find  which,  the  additions  of  all  these 
columns  must  be  examined  ;  (6)  after  the  footings  of  the  Proof  account  agree, 
take  a  trial-balance  of  the  Ledger  account-footings,  including  all  the  unclosed 
(unruled)  accounts  which  balance,  and  then  find  the  sum  total  of  these  foot- 
ings ;  (7)  if  these  sums  total  agree  with  their  corresponding  footings  on  the 
Proof  account,  each  side  of  the  Ledger  is  proved  to  be  correct;  if  these  sums 
total  do  not  agree  with  the  Proof  account  footings,  a  mistake  has  been  made 
in  the  Ledger,  to  find  which  it  is  only  necessary  to  examine  that  side  of  the 
Ledger  the  trial-balance  footing  of  which  does  not  agree  with  its  corre- 
sponding footing  of  the  Proof  account.  The  Proof  account  shows  what  the 
footings  of  the  trial-balance  should  be;  therefore,  if  the  footing  of  one  side 
of  the  trial-balance  does  not  agree  with  the  footing  on  its  corresponding  side 
of  the  Proof  account,  it  can  be  ascertained  whether  there  has  been  too  much, 
or  not  enough,  posted  to  that  side  of  the  Ledger  — and  what  that  excess, 
or  shortage,  as  the  case  may  be,  is.  To  ascertain  this,  we  find  the  difference 
between  the  footing  of  that  side  of  the  Proof  account  and  the  sum  total  of 
that  side  of  the  trial-balance.  The  error  will  then  be  found  either  in  an 
incorrect  posting  of  an  amount  to  that  side  of  the  Ledger,  or  else  in  taking 
off  the  footingof  that  side  of  some  account  in  the  Ledger  — and  consequently, 
no  time  need  be  wasted  in  looking  for  the  error  elsewhere. 

When  this  method  is  used,  the  debit  and  credit  Miscellaneous  columns  in 
the  Journal  must  be  footed  and  the  footings  thereof  carried  forward  from  page 
to  page  until  the  end  of  the  month,  in  order  that  these  amounts  may  then  be 
posted  to  the  Proof  account  in  the  Ledger.  Further,  when  an  account  bal- 
ances, it  must  not  be  ruled  off  and  closed  up  until  the  end  of  the  year,  at 
which  time  all  the  accounts  which  balance  are  closed,  a  new  trial-balance 
taken,  and  a  new  Proof  account  opened,  in  the  manner  described  in  "  i."  "2,"' 
vnd  "3"  of  this  article. 


1121 


DOUBLE   ENTRY   BOOK-KEEPING. 

However  —  it  is  always  better  to  have  a  safe<,'uard  against  the  committing 
of  errors,  by  adopting  some  method  of  proving  the  work  as  you  proceed 
(see  953  to  967),  than  it  is  to  seek  for  a  quick  way  of  approximately  locating 
the  mistakes  after  you  have  made  them. 


OLD-STYI.E  JOURNAL-RULING. 

1121.  Where  the  old  form  of  Journal  is  in  use,  a  Sales  Book  is  usually 
kept  and  all  sales  are  recorded  therein  —  no  sales  being  recorded  in  the 
Journal.  In  order  that  the  features  of  the  new  form  of  ruling  (see  342  to 
384)  may  be  more  readily  compared  with  those  of  the  old,  it  is  thought  best 
to  illustrate  the  latter  here,  and  to  show,  at  the  same  time,  the  old  form  of 
Journal-entries.     The  following  is  the  form  of  an 


OLD-STYLE   JOURN.\L. 

December  4,   1880. 


L.F. 
4. 

Bills  Rcc. 

Debit. 

Credit. 

1 

44 

To  G.  W.   Bennett 

200 

_ 

Note  gods..  12-4-So. 

( For  comparison,  see  373-374-) 

5- 

40 

Mdse.                                to                                Sunds. 

1 

45 

1 

44 

Ed.  Russell-,  can  Peaches,  rei'd 

20 

44 

Alex.  Dollus— I  keg  H.  Herrings,  rel'd 

. 

35 

(For  comparison,  see  376  to  378.) 

8. 

46 

Arbuckle  Bros. 

218 

«o 

41 

To  Bills  Pay. 

218 

60 

Ace.  60  ds..  12-3-80. 

(For  comparison,  see  380-381.) 

In  this  form  of  Journal-ruling  it  will  at  once  be  seen,  when  comparing  it 
with  the  form  illustrated  in  paragraphs  342  to  3S4  of  this  book,  that  one  line 
is  wasted  for  each  entry  that  is  made  ;  therefore,  you  can  calculate  how  many 
lines  are  wasted  on  each  page  of  your  book  (if  you  have  this  form  of  Journal) 
by  counting  the  number  of  entries  thereon.  Further,  in  this  form  of  ruling, 
all  the  Mdse.  debits  have  to  be  posted  separately,  while  in  the  improved  form 
the  aggregate  of  all  such  debits  is  posted  in  one  entry  at  the  end  of  each 
month.     (See  469.) 

•     221 


1122 


DOUBLE   ENTRY   BOOK-KEEPING. 

SALES  BOOK,  COMMON  FORM. 

1122.     The  following  is  the  common  form  of  Sales-Book  ruling: 
December  2,  1880. 


. 

Ed.  Russell 

^1A-^ 

5 

lbs.  Rio  Coffee 

y^ 

, 

lb.  Y.  H.  Tef 

8  lbs.  A  Sugar°° 

2 

cans  Peaches 

' 

gal.Sy.up"      . 

Broom^' 

^ 

Alex.  Dollus 

^<j>^ 

♦ 

bbls.  Apples 
Alex.  Dollus 

4- 

^^"^^^ 

, 

keg  Holland  Herrings 

I 

sack  XX  Flour 

doz.  Oranges 
Ed.  Russell 

10. 

^^^ 

3 

bbls.  Salt 
bbl.  Flour 

13- 

. 

Frank  Burgess 
lbs.  Cheese 

I  doz.  Eggs 

-^^5^^ 

18 

•'    A  Sugar 
bbl.  Apples°° 

I  Broom 

1.50 
I  sack  Flour 

Forward 

(For  above  examples,  see  paragraphs  370,  371,  375,  387  and  392.) 
When  posting  is  done  directly  from  this  book,  the  ledger-folio  is  written, 
after  an  item  has  been  posted,  in  the  left-hand  margin  of  the  book,  usually 
in  the  manner  above  shown.  (See  '744/"-)  The  footing  of  the  outside 
column  is  carried  forward  from  page  to  page  until  the  end  of  the  month,  when 
the  last  footing,  being  the  sum  total  of  the  charge  sales  for  the  month,  is 
posted  to  the  credit  of  the  Merchandise  account. 


1123-1124 


DOUBLE    ENTRY    BOOK-KEEPING. 


ON    CLOSING  A  CASH    BOOK    WHICH    HAS   SEVERAL    "EXTRA" 
COLUMNS. 
1123. 

CASH.  CR. 


1 

1- 

Expense.— Rent 

■•        -Set  B^K^Sta!'" 

Interest.- Dis.  Russell's  note 

Expense.- Ink    Pens    Eraser 

Interest.— Dis.  Russell's  note 

Salaries. -Malt'  Smft" 

•        "      -Kinsella'    Saxmn" 

Expense.— Sign.  G.  &  E. 

Salaries.— Kinsclla 

c:    "'5°        375 
— Saxton    Smith 


Interest.- On  Thurber  note 
Expense —2  M  Stat.    L.and  B.H. 


|ex^„ 

se 

Salaries 
Dr. 

■■£-• 

75 

_ 

1 

1 

33 

6o 

85 

Expense. — Total  for  month 


(For  above  examples,  see  506  to  553,  in  which,  however,  the  "Miscellane- 
ous" items  are  omitted.) 

When  a  Cash  Hook  has  several  "extra"  columns  on  one  side,  that  side 
may  be  ruled  and  closed  in  the  simplest  manner  as  above.  Thus  it  will  be 
seen  that  the  "Total"  columns  illustrated  in  477  and  484  may  be  dispensed 
with,  or  else  used  for  "extra"  columns;  as,  for  example,  477  might  be  used 
for  "Interest,"  and  484,  for  "Salaries." 

1124.  Instead  of  ruling  off  and  closing  the  Cash  Book  daily,  all  the 
columns  are  simply  footed  in  pencil  at  the  close  of  each  day  and  the  balance 
shown  in  the  'Explanation"  space  on  the  left-hand  side  of  the  book,  in  the 
same  manner  as  the  balance  of  an  unclosed  account  is  shown  on  the  Ledger. 
For  example,  see  "3,723.51  "  after  paragraph  491. 


223 


1125-112? 

DOUBLE   ENTRY   BOOK-KEEPING. 


SUNDRY  HINTS  TO  BUSINESS  MEN. 

1125.  However  little  the  business  man  may  know  of  book-keeping-,  he 
should  at  least  learn  this  much,  namely:  to  make  a  practice  of  adding  the 
money-columns  in  his  Cash  Book,  and  to  examine  the  items  in  them  which 
are  sometimes  entered  in  bulk  and  at  other  times  singly,  or  separately.  It  is 
owing  to  this  latter  practice  that  some  houses  have  arrived  at  the  conclusion 
that  the  saving  of  space  in  the  General  Cash  Book  by  means  of  a  Petty  Cash 
Book  or  Petty  Expense  Book,  "does  not  pay!" — and  it  is  owing  to  the  former 
practice  that  some  houses  have  almost  concluded  that  even  the  keeping  of  a 
book-keeper  "does  not  pay!" 

While  adding  the  columns  of  the  Cash  Book,  the  business  man  should  also 
see  whether  the  same  footings  are  brought  forward  to  the  top  of  one  page  as 
are  at  the  bottom  of  its  corresponding  preceding  page  —  being  very  careful, 
at  the  same  time,  not  to  allow  any  transpositiort  of  figures  to  escape  his 
notice.  He  should  also  occasionally  glance  over  the  Journal  entries  wherein 
appear  credits  to  his  customers,  for  perhaps  by  so  doing  he  may  learn  that  his 
book-keeper  ought  to  have  entered  some  of  the  amounts  found  there  —  in  his 
Cash  Book.  It  is  furthermore  a  good  plan  to  occasionall)-  go  through,  say, 
two  months'  entries  on  the  credit  side  of  the  Cash  Book  and  take  off  on  a  slip 
of  pafxer  the  amounts  charged  to  the  book-keeper,  then  to  turn  to  the  book- 
keeper's personal  account  in  the  Ledger  and  check  off  therefrom,  on  the  said 
slip,  the  amounts  found  posted  to  that  account.  Probably,  when  he  con- 
cludes the  "examination,"  all  the  items  on  the  slip  will  have  been  checked. 
Should  he  wish  to  continue  his  "inquiries"  still  further,  he  may  verify 
the  footings  and  balances  of  those  accounts  in  his  Ledger  which  are 
other  than  those  of  customers  and  creditors  ;  as,  for  instance,  the  following- 
Expense,  Merchandise,  Interest,  Bills  Receivable,  etc.,  etc. 

"A  word  to  the  wise  is  sufficient." 

So  long  as  he  is  not  interfered  with  in  his  work,  the  honest  book-keeper 
does  not  care  how  often  his  employer  substantiates  his  confidence  in  him. 
There  is  certainly  no  person  in  the  house  who  has  a  better  right  to  become 
"well  acquainted"  with  the  books  of  the  concern  than  the  book-keeper's 
employer,  and  it  ought  to  be  the  delight  of  every  good  book-keeper  to 
explain  to  his  employer  his  books,  his  entries,  and  his  methods;  in  fact  he 
should  invite  his  employer  to  familiarity  with  his  books,  and  thus  demonstrate 
to  him  that  there  is  nothing  in  them  for  him  to  "discover,"— unless  it  be, 
perhaps,  some  little  error  in  his  trial-balance  for  which  he  has  been  seeking 
persistently  two  or  three  months  ! 

112<>.     You  cannot  stop  payment  on  a  check  which  has  been  "certified." 

1127.  After  a  check  has  been  made  any  alteration  thereon  invalidates  it 
as  regards  the  bank  ;  for  instance,  altering  its  date  is,  in  effect,  as  truly  a 
forgery  as  that  of  imitating  the  drawer's  signature.  If  a  banker  pays  such  a 
check,  he  can  be  made  to  pay  the  amount  to  the  drawer. 


1 128-1133 

DOUULli    ENTRY    BOOK-KEEPING. 

*l28.  If  anything  be  deposited  with  a  banker  merely  for  safe  keeping, 
as,  for  instance,  a  watch,  a  thousand-dollar  bill,  or  a  government  bond,  and 
that  identical  article  is  to  be  returned  to  the  depositor,  and  it  is  understood 
that  the  banker  is  to  receive  no  compensation  for  the  keeping  thereof — if 
that  article  be  stolen,  the  depositor  cannot  recover  its  value  from  the  banker, 
even  though  it  were  stolen  by  one  of  the  banker's  employes. 

1129.  If  at  the  bank  you  should  hand  your  deposit  to  any  other  person 
than  to  him  who  is  rcLjularl}-  authorized  to  receive  deposits,  as,  for  instance, 
to  the  notc-tcllcr,  or  to  the  tliscount-clerk,  and  that  person  should  abscond 
with  your  money  before  it  was  credited  to  your  account,  you  would  have  to 
suffer  the  loss  —  unless  it  could  be  proved  that  that  person  frequently  filled 
the  position  of  receiving-teller  as  a  substitute. 

1 130.  If  a  banker  pays  a  check  after  he  has  been  notified  that  the  drawer 
thereof  is  dead,  he  makes  himself  liable  to  the  legal  representatives  of  the 
deceased  depositor  for  the  amount  of  the  check.  If  he  pa\-s  a  check  after  he 
has  learned  that  the  drawer  has  either  become  a  bankrupt  or  made  an  assign- 
ment, he  must  make  this  amount  good  to  the  assignees  and  then  take  his 
place  in  the  ranks  of  the  depositor's  creditors,  with  the  amount  of  this  check 
as  a  claim  against  the  estate. 

1131.  When  a  person  while  a  resident  of  one  state  draws  a  time-draft 
with  interest  at  a  certain  rate  per  cent,  which  is  legal  in  his  state,  upon  a 
person  who  is  a  resident  of  another  state  where  the  aforesaid  interest  is 
usurious,  and  the  draft  is  by  the  latter  accepted,  the  drawer  can  compel  the 
acceptor  to  pay  the  interest  called  for  on  the  draft,  even  though  the  latter 
were  made  payable  in  the  state  where  the  rate  thereon  specified  is  usurious. 
The  law  of  the  state  wherein  the  paper  is  dated  governs  all  the  stipulations 
thereof 

1132.  In  taking  a  check  which  is  dated  ahead,  it  should  be  remembered 
that  the  drawer  thereof  may,  before  that  date,  withdraw  all  his  funds  from  the 
bank  upon  which  it  is  drawn  ;  or,  he  may  die  ;  or,  he  may  become  a  bankrupt ; 
or,  he  may  make  an  assignment  —  in  any  of  which  cases  the  banker  could  not 
be  held  for  the  amount  of  the  check.  In  the  first-mentioned  case,  the  holder 
could  look  only  to  the  drawer  for  payment ;  in  the  last  three,  to  no  one  — 
because,  in  law,  all  papers  are  supposed  to  have  been  written  on  the  day  upon 
which  they  are  dated.  Therefore,  in  giving  a  receipt  for  a  check  which  is 
dated  ahead,  you  should  specify  therein  the  particulars  respecting  both  the 
number  and  the  date  of  the  check. 

1133.  A  banker  cannot  be  held  responsible  for  a  loss  which  may  be 
occasioned  through  his  having  paid  a  check  which  has  been  "raised,"  that  is,  a 
check  which  was  originally  drawn  for  a  certain  amount  and  afterward  fraud- 
ulently increased  to  a  larger  amount.  Neither  can  he  be  held  responsible, 
even  though  the  check  was  "certified"  for  the  larger  amount.  His 
responsibility  ceases  when  he  guarantees  the  genuineness  of  the  signature 
and  the  sufficienc\-  of  funds  on  deposit  to  cover  the  amount  of  the  check. 

225 


1131 

DOUBLE    ENTRY   BOOK-KEEPIXG. 

The    only  person  to  whom  the  drawer  of   the  check  can  have    recourse  in 
such  a  case  is  the  last  endorser  of  it. 

However  —  if  the  "raising"  were  unskillfully  done,  that  is,  done  in  such  a 
manner  that  had  the  banker  exercised  a  reasonable  degree  of  caution  he 
would  have  discovered  that  the  amount  had,  in  all  probability,  been 
"raised,"  he  can,  in  such  a  case,  be  held  responsible  for  the  amount  paid  in 
excess  of  the  original  amount. 


PARTNERSHIP  SETTLEMENTS. 

EXAMPLE    No.    i.       • 

1134-. — The  Books  Have  Been  Kept  by  Single  Entry;  The  Partners  Invested 
Unequal  Amounts  and  Drew  out  of  the  Business  for  Their  Private  Use 
Unequal  Amounts;  The  Partner  Who  Invested  the  Smaller  Amount  Pays 
to  the  Partner  Who  Invested  The  Greater  Amount  Interest  on  One- 
Half  OF  the  Difference  Between  Their  Investments.      {See 3 ig  and  834^ 


R.  Leslie  and  Hugo  Smith  entered  into  the  grocery  business  January  i, 
1886,  with  the  following 

ASSETS. 

Cash  invested  by  R.   Leslie $2,000  00 

Notes  invested  by  R.  Leslie 1,000  00 

Cash  invested  by  Hugo  Smith $1 ,000  00 

Merchandise  invested  by  Hug.>  Smith 500  00 

1,500  00 

Total  investment  of  firm $4,500  00 

The  partnershi])  agrecincnt  was  that  Smith  was  to  pay  to  Leslie  10  i)er 
cent,  interest  on  one-half  of  the  difference  between  their  investments,  the 
gains  or  losses  to  be  shared  equally.  Having  been  in  business  one  }car,  that 
is,  on  January  I,  1887,  they  now  wish  to  ascertain  the  present  worth  of  each 
partner,  which  they  proceed  to  do  thus  :  They  take  an  inventory  (account  of 
stock)  and  find  that  they  have  merchandise  on  hand,  $1,373.48  ;  the  Ledger 
shows  good  accounts  due,  $1,987.10;  notes  on  hand  from  other  parties, 
$862.30;  cash  on  hand  ami  in  bank,  $1,735.18;  horse  and  wagon,  $280.00  ; 
store  fixtures  (counters,  shelves,  desks,  safe,  etc.),  $450.00;  five  bank  shares, 
$500.00. 

226 


1134 

DOUHLE    ENTRY    BOOK-KEEPING. 

They  owe,  on  account,  $1,736.20;  on  notes,  $400.00.  R.  Leslie  has 
drawn  for  his  private  use,  during  the  year,  $672.00  ;  Hugo  Smith,  $741.00. 
They  now  make  a  statement  of  the  assets  and  h'abilitics,  thus  : 

ASSETS. 

Personal  accounts  due  to  us , $  i  .987   10 

Bills  Receivable  —  Notes  owing  lo  us 862  30 

Merchandise  on  hand 1,373  4? 

Cash  on  hand • i,735   »8 

Horse  and  wagon 28000 

Store  fixtures 45°  0° 

First  National  Bank  Shares 500  00 

Total  assets $7,188  06 

LI.VBILITIES. 

Personal  accounts  we  owe $1,7.^6  20 

Bills  Payable  —  Notes  we  owe 400  00 

Total  liabilities $2,136  20 

Present  worth  of  firm,  January   I,   1887 $5,051   86 

Amount  drawn  for  private  use  by  R.  Leslie 672  00 

Amount  drawn  for  private  use  by  H.  Smith 74'  00 

$6,464  86 
Worth  of  firm  January  I,  1886 4.500  00 

Gross  gain $1,964  86 

R.  Leslie's  one-half  of  gross  gain $982  43 

H.  Smith's  one-half  of  gross  gain 98243 

The  amounts  drawn  for  private  use  by  each  of  the  partners  are  not  in- 
cluded in  the  above  "personal  accounts  due  to  us,"  for  the  private  accounts 
are  not  assets  of  the  firm,  although  we  might  add  them  to  the  assets  in  order 
to  ascertain  the  gross  gain,  the  effect  being  the  same,  as  may  be  seen  in  the 
next  example  of  "partnership  settlements." 

Having  found  the  present  worth  of  the  firm  to  be  $5,051.86,  we  add  to  this 
sum  the  amount  drawn  for  private  use,  as  shown  by  each  partner's  private 
account,  in  order  to  find  the  gross  gain  of  the  firm.  The  reason  for  so  doing 
is  obvious,  from  the  fact  that,  if  they  were  worth  $4,500  at  the  beginning  of 
business,  and  their  assets  now  exceed  their  liabilities  by  $5,051.86,  the  gross 
gain  for  the  year  must  have  been  $5,051.86  plus  the  amount  drawn  within  the 
year  by  the  partners  for  their  private  use. 

After  finding  the  gross  gain  of  the  firm  as  above,  we  divide  the  same 
equally  between  the  partners,  giving  each  partner's  stock  account  credit  for 
the  amount.     But  since  Smith  was  to  pay  Leslie  interest  on  one-half  of  the 

227 


1134 

DOUBLE   ENTRY   BOOK-KEEPING. 

difference  between  their  investments,  which  is  $75,  we  now  charge  Smith's 
stock  account  and  credit  LesHe's  stock  account  with  this  amount  ;  after 
which  we  balance  the  private  accounts  of  each  partner  and  transfer  the 
amounts  to  their  respective  stock  accounts.  We  now  balance  these  stock 
accounts  in  order  to  find  the  present  worth  of  each  partner,  as  well  as  how 
much  each  has  gained  during  the  year.  The  partners'  accounts  then  appear 
as  follows  : 

R.    LESLIE. 

Credit— tiei  worth  January  i,  1886 

One-half  gross  gain,  January  i ,  1887 

Interest  on  pne-half  of  difference  between  investments 

Total  credit 

ZI^Aj/— Less  amount  drawn  for  private  uae 

R.  Leslie's  present  worth,  January  1,   1887 $3,385  4J 

HUGO    SMITH. 

Credit — Net  worth  January  i,  1886 $1,500  00 

One-half  gross  gain,  January  I,  1887 982  43 

Total  credit $2,482  43 

ZJrf;/— Less  amount  drawn  for  private  use $741  00 

Less  interest  on  one-half  of  difference  between  investments. .  .         75  00 

Total  debit $81600        81600 

Hugo  Smith's  present  worth,  January  i,  18S7 $1,666  43 


$3,000 

00 

982 

43 

75 

00 

$4,057  43 

672 

00 

Net  worth  of  firm,  January  I,  1887 $5,051  86. 

The  amount  gained  by  each  partner  may  easily  be  found  by  deducting  the 
amount  of  his  worth  at  the  opening  of  the  business  from  the  amotint  of  his 
present  worth,  which,  for  Leslie  is  $385.43,  and  for  Smith,  $166.43. 

If  they  continue  in  business.  Smith  will  have  to  pay  Leslie  interest  on 
one-half  of  the  difference  between  $3,385.43  and  $1,666.43,  which  difference  is 
$1,719,  and  which  interest-bearing  amount  is,  therefore,  $859.50. 


228 


[135 


DOUBLE   ENTRY   BOOK-KEEl'lNl 


EXAMPLE  No.  2. 


1135. — The  Partners  Invested  Unequal  Amounts  ;  Made  Additional  Invest- 
ments After  Having  Entered  Into  Business;  Drew  Out  of  the  Business 
FOR  Their  Private  Use  Unequal  Amounts,  and  Are  to  Divide  Gains  or 
Losses  Pro-Rata  According  to  Investment  at  Beginning  of  Business — 
The  Partner  Having  the  Lesser  Amount  Invested  Not  Paving  to  the 
Other  Partner  Interest  on  the  Difference  of  Capital. 


S.  A.  Emerson  and  J.  H.  Goodwin  enter  into  the  dry-goods  business  Jan- 
uary I,  1885,  investing  as  follows: 

January  I,  1885,  S.  A.  Emerson  invests $2,387  40 

January  1,  1885,  J.  H.  Goodwin  invests 1,92285 

Total  investment  of  firm. «4.3io  25 

Within  the  year  18S5  S.  A.  Emerson  draws  out  for  private  use.  over  addi- 
tional investments  made,  $786.30;  J.  H.  Goodwin  draws  out,  over  addi- 
tional investments  made,  $1,005.73.  In  the  year  1886  S.  A.  Emerson  makes 
additional  investments,  from  private  resources,  over  and  above  the  amount 
drawn  for  private  use,  $1,126.97;  J.  H.  Goodwin  also  invests  over  the  amount 
drawn  for  his  private  use,  $473.26.  At  the  end  of  the  year  1886  they  make  a 
statement  of  their  assets  and  liabilities,  as  follows: 


Merchandise  on  li.ind 

Cash  on  hand 

Personal  accounts  due  to  us 

Notes  on  hand 

Real  Estate 

J.  H.  Goodwin  owes  firm,  on  private  account. 


$2 

786 

00 

024 

60 

235  43 

645 

20 

000 

00 

532 

47 

Total  assets. 


$8,223  70 


LIABILITIES. 


Personal  accounts  we  owe. 

Notes  we  owe 

Firm  owes  S.  A.  Emerson  i 
Total  liabiliti 


Present  worth  of  firm,  including  private  account 


. . .     $2,048  00 

1,655  34 

340  67 


1135 


DOUBLE    ENTRY    BOOK-KEEPING. 

Solution:  The  total  investment  of  the  firm  January  i,  1885,  was  $4,310.25. 
S.  A.  Emerson's  share  of  the  investment  was  $2,387.40,  which  equals  .55, 
or  55  per  cent.  J.  H.  Goodwin's  investment  was  $1,922.85,  which  equals 
.45,  or  45  per  cent.  Consequently,  S.  A.  Emerson's  share  of  the  net  gain  or 
net  loss  must  be  .55  of  the  whole,  and  J.  H.  Goodwin's  share  .45.  We  find  the 
decimal  fraction  or  percentage  in  the  following  way : 

Divide  Emerson's  share  by  the  total  investment,  thus  : 


The  remaining  .45  is,  of  course,  Goodwin's  share.  (When  there  are  more 
than  two  partners,  we  divide  each  partner's  investment  by  the  total  invest- 
ment, to  get  his  fractional  part  or  percentage.) 

Worth  of  firm,  January  I,  1S85 $4.3'°  2$ 

Worth  of  firm,  January  i,  18S7,  including  private  accounts 4,179  69 

Net  loss  of  firm S130  56 

S.  A.  Emerson's  share  of  the  net  loss  is  .55,  and  J.  H.  Goodwin's  is  .45, 
which  we  find  in  the  following  way  : 

Multiply  the  total  loss  by  .55  to  find  Emerson's  share,  thus  : 

130.56 

JJ 

65280 
65280 

$71.8080 

The  remainder  of  the  $130.56,  after  deducting  the  $71.81,  must  be  Good- 
win's share,  which  is  $58.75.  We  now  charge  each  partner's  stock  account 
with  its  respective  share  of  the  net  loss  (Emerson's,  $71.81  ;  Goodwin's, 
$58.75).  We  then  transfer  the  partner's  private  accounts  to  their  stock 
accounts  and  balance  the  latter.  The  stock  accounts  will  then  show  the 
present  net  worth  of  each  partner. 

ILLUSTRATION   OK   THE   PRIV.\TE   AND   STOCK   ACCOUNTS. 

5.  A.  Emerson,  Private  Account. 


Dec.  31,    1885.— Drawn   out   during 
the  year,   over  the 
vested 

Dec.  31,  1886  —To  Stock  acct. 


Dec.    31,     1886.  —  Invested     during 

the  year,     over    amount    drawn 

J786  30 

out 

$1,126  97 

340  67 

$1,126  97 

$1,126  97 

1135 


DOUBLE   ENTRY    HOOK-KKEPINO. 
y.  H.   Goodwin,  Private  Account. 


Dec.    31,     1885.- Drawn   out    during 
the  year,  over   the     amount   in- 


$1,005    73 


Dec.    31,   1886.  —  Inrested    during 
the  year,    over   amount   drawn 

Dec.  31,   1886.— By  Stock  acct 


»473  26 
532  47 


5.  A.  Emerson,  Stock  Account. 


Dec.  31,   1886.— Share  of  net  loss 
Jan.  I,  1887.— Present  net  worth. 


Jan.  I,  1885.— Net  worth. . 
Dec.  31,   18S6. — By  Private 


$2,387  40 

340  67 

52,728  07 


Jan.  I,  1887.— Net  worth $2,656  26 

J.  H.  Goodwin,  Stock  Account. 


Dec.  31,  1886.  —Share  of  net  loss 

%    58  75 

Jan.  I,  1885-Net  worth 

$1,922  85 

Dec.  31,  1886.— To  Private  account. . . . 

532  47  i 

Jan.  I,  1887.  — Present  net  worth 

>.33«  63 

$1,922  85 

$1,922  85 

Si,33'  63 


Wc  find  that  S.  A.  Emerson's  private  account  is  credited  in  the  year  1886, 
with  additional  investments,  over  and  above  the  amount  drawn  for  his  private 
use,  $1,126.97,  and  debited  in  the  year  1885  with  $786.30  over  and  above  the 
additional  investments  made  in  that  year.  The  difference  between  the  two 
sides  of  Emerson's  private  account  shows  a  balance  to  his  credit  of  $340-67, 
which  amount  we  transfer  to  the  credit  side  of  his  stock  account. 

J.  H.  Goodwin's  private  account  is  debited  in  the  year  1885,  over  and  above 
the  additional  investments  made,  with  $1,005.73,  and  credited  in  the  year 
1886,  over  and  above  the  amount  drawn  for  his  private  use,  with  $473.26. 
The  difference  between  the  two  sides  of  this  account  shows  a  balance  to  its 
debit  of  $532.47,  which  amount  we  transfer  to  the  debit  side  of  Goodwin's 
stock  account. 

We  balance  the  private  accounts  when  we  transfer  the  amounts  to  the 
stock  accounts. 

The  stock  accounts  arc  now  balanced  to  show  the  present  worth  of  each 
partner.  S.  A.  Emerson  is  credited  at  the  openint,^  of  business  with  $2,387.40 
and  at  the  end  of  the  year  1886  with  $340.67,  or  the  amount  invested  during 
the  two  years  in  business  over  and  above  the  amount  drawn  for  his  private 
use.  He  is  debited  with  $71.81,  his  share  of  the  net  loss  of  the  firm.  The 
difference  between  the  two  sides  of  Emerson's  stock  account  now  shows  his 


231 


1135 

DOUBLE   ENTRY   BOOK-KEEPING. 

present  worth,  or  present  interest  in  the  concern,  which  is  $2,656.26. 
J.  11.  Goodwin  is  credited  at  the  opening  of  business  with  $1,922.85  and 
debited  at  the  end  of  the  year  1886  with  $532.47,  or  the  amount  drawn 
during  the  two  years  in  business  over  and  above  the  additional  investments 
made.  He  is  also  debited  with  $58.75,  his  share  of  the  net  loss  of  the  firm. 
The  difference  between  the  two  sides  of  Goodwin's  stock  account  now  shows 
his  present  worth,  or  present  interest  in  the  concern,  which  is  $1,331.63. 
The  interest  of  each  partner  in  the  concern  is,  therefore,  as  follows  : 

S.  A.  Emerson's  present  worth $2,656  26 

J.  H.  Gooiiwin's  present  worth 1.33'   63 

Present  net  worth  of  firm,  Jan.  I,  18S7 ' $3,987  89 

Each  partner's  present  worth  should  stand  in  proportion  to  the  net  worth 
of  the  firm  on  January  i,  1887,  as  it  stood  at  the  opening  of  business.  S.  A. 
Emerson's  interest  was  then  .55.  In  order,  therefore,  to  find  what  it  should  be 
now,  we  multiply  the  net  worth  of  the  firm,  $3,987-89.  by  .55,  which  gives 
$2,193.34,  which  amount  is  $462.92  less  than  the  amount  he  actually  has  now 
in  the  business.  J.  H.  Goodwin's  interest  in  the  concern  should  be  .45,  which 
is  found  in  the  same  way  as  that  in  which  Emerson's  interest  was  ascertained, 
and  which  is  $1,794.55,  or  $462.92  more  than  he  actually  has  now  in  the 
business.  If  they  continue  in  business,  Emerson  is  entitled  to  draw  out 
$462.92,  while  Goodwin  should  pay  in  from  his  private  resources  the  same 
amount.  Then  their  interests  would  be  the  same  as  when  they  began 
business  —  Emerson's  .55  and  Goodwin's  .45. 

If  Goodwin  wishes  to  make  up  for  his  deficiency  from  private  resources, 
so  that  his  account  will  be  .45  (while  Emerson's  is  .55  at  his  present  worth, 
$2,656.26),  we  divide  $2,656.26  by  .55  to  find  what  the  whole  investment  of  the 
firm  must  be,  which  gives  $4,829.56.  If  the  whole  investment  required  is 
$4,829.56,  Goodwin's  investment  must  be  .45  of  this  amount,  which  equals 
this  amount  multiplied  by  .45,  or  $2,173.30.  Inasmuch  as  he  has  now  in 
business  only  $1,331.63,  he  must  pay  in  from  private  resources  the  difference 
between  $2,173.30  and  this  amount,  which  is  $841.67.  After  this  payment 
has  been  made,  Goodwin's  account  will  stand  credited  with  $2,173.30  and 
Emerson's  with  $2,656.26— total,  $4,829.56,  or  the  net  worth  of  the  firm. 

If  Emerson  wishes  to  withdraw  from  the  business  an  amount  sufficient  to 
reduce  his  account  so  that  it  will  now  be  .55  (while  Goodwin's  is  .45  at  his 
present  worth,  $1,331.63),  we  divide  $1,331-63  by  .45  to  find  what  the  whole 
investment  of  the  firm  must  be,  which  gives  $2,959.18.  Consequently,  if 
this  is  to  be  the  whole  investment  of  the  firm,  Emerson's  share  must  be  .55 
of  this  amount— which  we  find  by  multiplying  the  $2,959.18  by  .55,  which 
gives  $1,627.55  ;  or,  we  can  ascertain  what  Emerson's  share  is  by  simply 
deducting  Goodwin's  share,  $1,331.63,  from  the  whole  investment,  $2,959.18, 
which  remainder  is   $1,627.55,  or  Emerson's  share.     Hence,  as  Goodwin  has 


1135 

DOUBLE   ENTRY   BOOK-KEEPING. 

now  invested  in  the  business  only  $1,331.63,  and  the  stock  accounts  of  the 
firm  must  stand  in  the  same  proportion  to  each  other  as  at  the  opening  of 
business,  Emerson's  account  should  be  only  $1,627.55.  Now  since  Emerson 
has  \o  his  credit  on  his  stock  account  $2,656.26,  he  is  entitled  to  withdraw 
from  the  business  the  difference  between  this  amount  and  the  amount  which 
he  is  required  to  have  —  which  difference  is  $1,028.71.  After  withdrawing 
this  amount  his  account  would  stand  credited  with  $1,627.55,  and  Goodwin's, 
with  $1,331.63 —total,  $2,959.18.  Emerson's  interest  would  then  be  .55, 
and  Goodwin's,  .45. 

If  they  continue  in  business,  allowing  the  accounts  to  stand  as  they 
are,  and  agree  that  Goodwin  shall  pay  to  Emerson  interest  on  one-half  of  the 
difference  between  their  respective  investments,  Goodwin  will  have  to  pay 
interest  on  $5 14.36,  thus,  in  effect,  borrowing  that  amount  from  Emerson. 
(See  319.) 

If  they  wish  to  sell  out  the  business,  the  percentage  which  each  would 
have  is  ascertained  in  the  following  way:  Since  Emerson's  present  worth  is 
$2,656.26,  and  Goodwin's,  is  $1,331.63,  and  the  total  worth  of  the  firm  is 
$3,987.89,  we  find  what  Emerson's  percentage  would  be  by  dividing  his 
interest  by  the  total  worth  of  the  firm,  thus  : 

3988)2656.26  (.666 
23928 
26346 
23928 


24180 

23928 


252 

As  shown  above,  this  gives  .666,  or  66|  per  cent.  If  66|  per  cent,  be 
Emerson's  share,  Goodwin's  share  must  be  the  remaining  .334,  or  33^  per 
cent.  If  they  sell  out,  the  proceeds  of  the  sale  must  be  divided  according 
to  their  respective  interests  — Emerson's,  66|  per  cent.,  or  |;  and  Goodwin's, 
33J  per  cent,  or  |. 


1136-1137 

DOUBLE    ENTRY   BOOK-KEEPING. 


STOCK  COMPANIES. 
(continuation  of  article  begun  in  819  TO  828.) 

1136.  It  is  thought  advisable  here  to  extend  the  article  on  Stock  Com- 
panies, by  giving  several  propositions  which  have  arisen  during  the  past  five 
years,  and  which  have  reached  the  author  through  letters  received  from  the 
officers  and  book-keepers  of  Stock  Companies. 

Contrary  to  the  usual  custom,  which  is  explained  in  paragraph  822,  some 
Stock  Companies  wish  their  Capital  Stock  accounts  to  have  a  credit  upon  the 
opening  of  the  books  for  the  full  amount  of  their  authorized  capital,  regard- 
less of  the  amount  of  their  paid-up  capital.  In  order  that  a  Stock  Company's 
books  may  be  not  less  clear  and  unmysterious  than  are  the  books  of  a  plain 
partnership,  the  author  still  claims  that  the  Capital  Stock  account  should 
have  credit  for  the  paid-up  capital  only.  However,  since  this  is  one  of  the 
points  upon  which  a  book-keeper  cannot  use  his  discretion,  but  must  obey 
his  employer's  instructions,  the  following  propositions,  together  with  the 
author's  solutions  of  them,  will  here  be  given.  In  each  of  these  propositions 
the  Capital  Stock  account  is  credited  upon  the  opening  of  the  books  for  the 
full  authorized  capital. 

PARTNERSHIP  BOOKS  CHANGED  TO  STOCK  COMPANY    BOOKS. 

1137.  A  concern  which  has  heretofore  been  conducted  as  a  partnership 
is  incorporated  as  a  Stock  Company,  with  1,000  shares  at  $100  each,  $100,000. 
The  net  worth  of  the  old  firm,  at  the  closing  of  the  books,  was  $75,000,  the 
summary  of  which  was  made  as  follows : 

ASSETS. 

Accounts  Receivable *  4.5°° 

Bills  Receivable 3-°oo 

Real  Estate 2°-°°° 

Merchandise ",ooo 

Machinery  and  Tools "-ooo 

Cash '3-5o° 

LIABILITIES. 

Horace  Cook,  Stock  Account $40,000 

F.  J.  Knox,  Stock  Account j5>ooo 

234 


1138—1139 

DOUBLE    ENTRY    BOOK-KELPING. 

Cook  subscribes  for  and  takes  4CX)  shares  in  the  new  Company  for  his  in- 
terest in  the  concern,  and  Knox  subscribes  for  and  takes  350  shares  for  his 
interest  in  the  concern.  Of  the  remaining  250  shares  E.  D.  King  subscribes 
for  90,  P.  F.  Broydrick,  60,  and  100  shares  are  to  be  held  as  treasury  stock 
until  they  are  sold. 

1138.  The  entries  for  the  closing  of  the  partnership  books  are  as 
follows  : 

First  Entry. 

The  Cook  MTg  Co.,  Limited,  to  Sundries i1S,ooo 

Accounts  Receivable *  4.5°° 

Bills  Receivable 3.0°° 

Real  Estate 20,000 

Merchandise 22,000 

Machinery  and  Tools 12.000 

Cash "3-500 

The  above  entry  balances  all  the  resource  accounts  on  the  old  books  and 
opens  an  account  in  the  old  Ledger  for  the  new  concern,  showing  that  the 
old  concern's  resources  have  been  transferred  to  the  Stock  Company. 

Second  Entry. 

Sundries  to  The  Cook  M'f'g  Co.,  Limited $75.ooo 

Horace  Cook,  Stock  Account «40,ooo 

F.  J.  Knox,  Stock  Account 35.ooo 

Upon  the  transfer  of  the  resources  of  the  old  concern  to  the  new,  the  lat- 
ter issues  paid-up  certificates  to  the  members  who  constituted  the  old  firm  to 
the  full  value  of  those  resources,  each  member  receiving  a  sufficient  number 
of  shares  to  cover  the  amount  of  his  net  investment  at  the  time  the  transfer 
is  made. 

1139.  The  entries  for  the  opening  of  the  Stock  Company  books  are 
as  follows  : 

First  Entry. 

Sundries  to  Capital  Stock $100,000 

Subscription $90,000 

Horace  Cook,  400  shares $40,000 

F.  J.  Knox,  350  shares 35.00O 

E.  D.  King,  90  sharrs 9,000 

P.  F.  Broydrick,  60  shares 6,000 

$90,000 

Treasury  Stock lo.cxx> 

100  shares  to  be  sold. 


1U0-1U4 

DOUBLE    ENTRY    BOOK-KEEPING. 

Second  Entry. 

Sundries  to  Subscription $75.°°° 

Accounts  Receivable  (the  several  personal  accounts) $  4.5°° 

Bills  Receivable  (notes  on  hand) 3.°°° 

Real  Estate  (building)....; 20-ooo 

Merchandise  (manufactured  goods  on  hand) J 22,000 

Machinery  and  Tools 12.000 

Cash  (in  bank) '3. 500 

The  above  assets  are  transferred  from  the  books  of  Cook  &  Knox  to  those 
of  The  Cook  Manufacturing  Co.,  Limited. 

After  the  above  entries  have  been  made,  the  Subscription  account  will 
have  a  debit  balance  of  $15,000,  which  account  will  be  balanced  by  a  credit  of 
this  amount  from  the  Cash  Book  when  King  and  Broydrick  pay  for  their 
stock;  the  Treasury  Stock  account  will  have  a  debit  of  $10,000,  which  ac- 
count will  be  credited  and  the  Subscription  account  debited  whenever  any 
more  of  the  Company's  stock  is  subscribed  for. 

When  all  the  Company's  stock  is  subscribed  for,  the  Treasury  Stock  ac- 
count will  balance  ;  when  all  the  Company's  stock  has  been  paid  for,  the 
Subscription  account  will  balance. 

1140.  On  the  debit  side  of  the  Subscription  account  are  written  the 
names  of  all  the  stockholders,  together  with  their  certificate-numbers  and  the 
amounts  of  their  subscriptions.  'When  these  subscriptions  are  paid,  the  Sub- 
scription account  is  credited  opposite  to  the  respective  names  of  the  stock- 
holders who  pay  them,  in  the  same  manner  as  the  Petty  accounts  are  credited 
in  743  to  746.  'When  any  stock  remains  unpaid  for,  this  account  shows  by 
whom  the  amounts  are  owing. 

1141.  Fifty  shares  of  the  treasury  stock  mentioned  in  1137  and  1139 
are  placed  in  the  hands  of  trustees  to  be  sold.     What  entry.? 

Trustees $5,000 

To  Treasury  Stock $5,ooo 

There  is  usually  a  clause  in  the  Company's  by-laws  empowering  the  trus- 
tees to  dispose  of  its  stock  under  certain  conditions. 

1142.  A  stockholder  retires  and  his  stock  is  purchased  by  the  Company, 
which  gives  notes  therefor  and  holds  the  shares  for  sale.     What  entry.' 

Treasury  .Stock  to  Bills  Payable. 

1143.  Sidney  Griffin  subscribes  for  fi\e  shares  of  the  treasury  stock 
(see  1 1 39)  and  gives  his  note  therefor.     What  entry.' 

Bills  Receivable  to  Treasury  Stock. 

1144.  P.  F.  Broydrick  pays  $5,000  cash  and  gives  his  note  at  30  days  for 
$1,000  in  settlement  of  his  subscription  for  60  shares'.     What  entry? 


1145-1151 

DOUBLE    ENTRY    BOOK-KEEPINC. 

Subscription  account  is  credited  from  the  Cash  Book  for  $5,000,  and  the 
following  entry  is  made  on  the  Journal  for  the  note  for  $1,000  : 

Bills  Receivable  to  Subscription. 

1145.  When  notes  are  received  for  stock,  the  l.itter  is  generally  held  as 
collateral  security  until  the  notes  are  paid.  There  are  some  exceptions  to 
this  rule,  however,  as,  for  instance,  where  the  notes  are  made  by  an  officer  of 
the  Company. 

1146.  Stock  is  always  sold  upon  certain  conditions,  a  few  of  which  may 
be  enumerated  as  follows:  It  is  either  to  be  paid  for  in  full  upon  organiza- 
tion of  the  Company,  or  in  a  certain  number  of  installments  ;  if  not  paid  for 
within  a  certain  time  the  stock  is  declared  forfeited,  as  likewise  the  amount 
which  may  have  been  paid  thereon  —  each  stockholder  signing  an  agree- 
ment to  this  effect. 

1147.  When  a  person  enters  his  name  upon  the  Subscription  Book  of  a 
Stock  Company  for  a  certain  number  of  shares,  he  enters  into  an  agreement 
to  pay  certain  amounts  at  certain  times  then  stipulated  or  to  be  thereafter 
stipulated.  If  the  subscriber  does  not  conform  to  this  agreement,  he  can  be 
sued  in  the  same  manner  as  though  he  had  given  his  note  for  the  balance 
due. 

114S.  When  a  stockholder  makes  a  part  payment  on  his  subscription, 
merely  an  ordinary  receipt  is  given  to  him,  stating,  in  addition  to  the  date, 
name,  and  amount,  "as  payment  on  account  of  subscription  to  Capital  Stock." 

1149.  In  a  case  where  a  stockholder  has  made,  say,  onh'  one  payment  on 
his  subscription,  has  been  sued  for  the  balance  and  has  failed  to  pay,  should 
any  officer  of  the  Company  without  the  consent  of  all  the  other  stock- 
holders return  to  him  the  amount  which  he  has  paid,  the  latter  by  reason 
of  this  act  are  released  from  the  contract  with  the  Company  as  regards 
their  several  subscriptions. 

INSTALLMENTS. 

1150.  A  Company  is  organized  with  the  understanding  that  the  shares 
are  to  be  paid  for  in  four  equal  installments  ;  there  are  to  be  2,000  shares  at 
$100  eacli ;  the  payments  are  to  be  $J5  cash  upon  organization,  $25  in  three 
months,  $25  in  si.x  months,  and  $25  in  nine  months.     What  entry.' 

There  are  two  ways  of  disposing  of  this  proposition  : 

1151.  First. — Make  the  entry  upon  opening  the  books  the  same  as  in 
paragraphs  1 1 39  and  1 140;  leave  four  lines  after  each  subscriber's  name  on  the 
Subscription  account  in  the  Ledger — one  for  each  installment.  Then,  as  each 
subscriber  pays  his  installment,  post  the  credit  to  the  Subscription  account 
opposite  to  the  subscriber's  name,  and  on  the  proper  installment  line. 

After  the  last  installment  has  been  paid  in  full  the  Subscription  account 
will  balance. 

237 


152-1155 

DOUBLE    ENTRY    BOOK-KEEPING. 

1152.  Second. — The  other  way  is  to  open  four  Installment  accounts. 
The  object  in  doing-  this  is  to  show  after  each  installment  is  due,  the  amount, 
if  any,  which  is  unpaid  thereon.  When  this  method  is  adopted,  the  entry 
upon  opening  the  books  will  be  : 

Sundries  to  Capital  Stock S200,ooo 

Installment  No.  i,  due  March  I,  1887 $50,000 

"  "      2.     "  June  I,      "     50,000 

"  "      3.     "  Sept.  I,     "     50,000 


Dec.  1, 


50,000 


In  order  to  make  the  abovt  entry,  all  the  stock  must  have  been  sub- 
scribed for  ;  then  the  names  of  all  the  stockholders,  together  with  one-quarter 
of  the  amount  subscribed  for,  will  be  written  on  the  debit  side  of  each 
Installment  account,  which  account  will  be  credited  with  the  amount  of  each 
subscriber's  installment  when  it  is  paid. 

1153.  Suppose  that  after  the  third  installment  has  been  paid,  the  stock- 
holders vote  to  issue  full  paid-up  certificates  for  what  is  already  paid  up, 
namely,  75  per  cent,  of  $200,000,  or  $75  on  each  share  of  the  nominal  value 
of  $100.     What  entry  to  dispose  of  the  remaining  installment .' 

Commission ...     $50,000 

To  Installment  No.  4 jcq  000 

Each  share  is  then  worth  only  75  per  cent,  of  its  face  value.    (See  1 164.) 

1154.  Some  Companies  organize  with  the  understanding  that  a  certain 
percentage  of  the  nominal  value  of  the  shares  is  to  be  paid  at  the  time  of 
subscribing,  and  that  future  payments  are  to  be  made  at  such  times  and  in 
such  amounts  as  the  Company  may  require.  Until  all  the  subscriptions 
have  been  paid  in  full,  the  stockholders  of  such  Companies  are  assessed 
whenever  money  is  n^ded  with  which  to  pay  debts  or  transact  business. 
When  a  Coinpany  is  in  need  of  funds  its  directors  meet  and  decide  what 
percentage  of  his  subscription  each  stockholder  shall  pa_\-,  and  upon  what 
day  he  shall  pay  it.  Each  stockholder  is  then  notified  of  this  fact,  and  this 
is  called  "a  call,"  or  "an  assessment,"  that  is,  each  stockholder  is  called 
upon  for  a  certain  amount  of  mone\',  which  amount  is  determined  by  the 
aggregate  face  value  of  all  the  shares  held  by  him. 

BONDS. 

1155.  When  a  Company  wishes  to  procure  money  for  the  jiurpose  of 
paying  its  debts,  or  of  extending  its  business,  it  ma)-  do  so  by  obtaining  the 
written  consent  of  the  holders  of  two-thirds  of  the  stock  of  the  Company  to 
mortgage  its  real  estate  or  other  property  for  the  purpose  of  securing  the 
payment  of  a  certain  number  of  bonds,  of  a  certain  amount  each,  dated  on 
such  a  date,  payable  on  such  a  date,  and  bearing  interest  at  a  certain  rate  per 
cent,  per  annum   payable   semi-annually.      In  accordance  with  this  consent 

238 


115B-1157 

DOUKIJi    ENTRY    I!OOK-KKKPING. 

the  Company  then  executes  a  mortgage  to  trustees  and  has  its  bonds  en- 
graved. These  bonds  are  then  held  for  sale.  Whenever  any  of  them  are 
sold  (and  they  are  sold  for  cash  only),  Bonds  Payable  account  is  credited. 
These,  like  some  government  bonds,  have  interest-coupons  attached  to  them. 
Every  six  months  one  of  these  coupons  falls  due,  when  it  should  be  detached 
and  presented  to  the  Company  for  payment.  Coupons  which  are  not  pre- 
sented to  the  Company  for  payment  when  due  do  not  draw  interest.  An  ac- 
count is  usually  opened  for  Bond  Interest  and  debited  when  these  coupons 
are  paid,  or  the  amounts  paid  on  them  may  instead  be  debited  to  the  general 
Interest  account. 

The  Bonds  Payable  account  is  of  the  same  nature  as  the  Bills  Payable  ac- 
count, and  it  stands  as  a  liability  on  the  Company's  books  until  all  the  bonds 
have  been  redeemed  or  paid,  when  it  will  balance.  When  the  bonds  are  first 
obtained  no  entry  is  made  on  the  general  books  ;  it  is  not  until  some  of  them 
are  sold  that  an  entry  is  made,  and  then  the  Bonds  Payable  account  is  cred- 
ited, as  previously  stated. 

1156.  Registered  bonds  are  recorded  in  the  same  manner  as  deeds,  and 
consequently  are  not  transferable  without  re-registry ;  while  coupon  bonds 
are  not  recorded  and  are,  therefore,  transferable.  Interest  on  the  former  is 
usually  paid  by  checks,  while  on  the  latter  it  is  usually  paid  in  currency — 
the  canceled  checks  in  the  former  case  being  returned  as  vouchers  for  the 
interest  paid  on  the  registered  bonds,  and  the  coupons  being  held  as  vouchers 
for  the  interest  paid  on  the  coupon  bonds. 

CAPITAL  STOCK    INCREASED  AND    STOCK    DIVIDEND 
DECLARED. 

1157.  A  Com.pany  has  a  paid-up  capital  of  $I00,000,  which  is  the  full 
amount  for  which  it  was  incorporated.  After  having  been  in  business  two 
years,  during  which  time  no  dividends  have  been  declared,  its  Surplus 
Fund  account  stands  credited  with  $60,000.  The  Company  now  obtains 
authority  from  the  Secretary  of  State  to  increase  its  capital  stock  to 
$200,000,  which  increase  it  makes.  It  also  declares  a  "  stock  dividend"  of 
$50,000,  that  is,  a  dividend  which  is  to  be  paid  to  the  stockholders  in  shares, 
instead  of  in  cash.     What  entries.' 

First  Entry: 

Treasury  Stock $100,000 

To  Capit.-il  Stock Sioo.ooo 

For  the  amount  of  the  increase  of  capital. 

Second  Entry  : 

Surplus  Fund $50,000 

To  Stock  Dividend $50,000 


1158-1159 

DOUBLE   ENTRY    BOOK-KEEPING. 

For  the  amount  of  the  stock  dividend,  leaving  a  balance  of  $io,cxx>  to  the 
credit  of  the  Surplus  Fund  account  for  future  contingencies. 

Third  Entry: 

Stock  Dividend 850,000 

To  Treasury  Stock $50,000 

Writing  on  the  credit  side  of  the  Treasury  Stock  account  the  names  of 
the  stockholders  to  whom  the  dividend  shares  are  issued,  together  with  the 
amounts. 

There  is  $50,000  worth  of  new  stock  in  the  treasury,  after  the  dividend 
stock  has  been  issued  to  the  old  stockholders.  When  any  of  this  new  stock 
is  subscribed  for,  the  entry  for  such  subscription  will  be: 

Subscription  to  Treasury  Stock. 

Whenever  the  capital  stock  of  a  Company  is  increased  and  a  stock  divi- 
dend is  declared,  the  stockholders  surrender  their  old  stock  and  new  stock  is 
issued  to  them  in  proportion  to  the  number  of  shares  of  the  old  stock  which 
was  held  by  them.  The  accounts  in  the  Stock  Ledger  are  all  balanced  when 
the  old  stock  is  surrendered,  and  opened  again  when  the  new  stock  is  issued^ 
each  stockholder's  account  in  this  Ledger  showing  just  50  per  cent,  more 
shares  than  it  showed  before  the  stock  dividend  was  declared. 

This,  however,  is  not  always  done,  for  the  reason  that  sometimes  it  is  not 
possible  to  at  once  obtain  all  the  old  stock  certificates;  as,  for  instance,  in 
the  case  where  a  stockholder  has  borrowed  money,  given  his  certificate  as 
collateral  security,  and,  being  unable  to  substitute  other  securities,  cannot 
produce  it.  In  such  a  case,  at  the  meeting  called  to  increase  the  Capital 
Stock  and  declare  a  stock  dividend,  the  stockholder  in  question  would 
propose  that  the  old  certificates  be  retained  and  new  ones  issued  for  the 
increase.  If  this  proposition  were  carried,  entries  would  be  made  in  the 
Stock  Ledger  merely  for  the  additional  shares  issued  to  the  stockholders  as 
their  respective  dividends.  The  objection  to  this  mamter  of  increase  is  that 
the  old  certificates  would  not  indicate  the  new  capital  of  the  Company,  unless 
the  latter  were  stamped  upon  the  old  certificates.  This  would  require  the 
presentation  of  each  certificate  at  the  Company's  office. 

The  special  advantage  arising  from  the  declaring  of  a  "stock  dividend"  is 
that  the  Company  retains  for  use  the  cash  which  otherwise  it  would  have  to 
pay  out  were  a  "cash  dividend"  declared. 

1158.  No  Stock  Company  has  authority  to  issue  shares  until  it  is  incor- 
porated under  the  laws  of  the  State  in  w  hich  it  is  located  ;  neither  can  any 
Company  increase  its  capital  stock  withcnit  authority  from  the  Secretary  of 
State  to  do  so. 

1159.  When  a  dividend  is  declared  it  is  sometimes  for  a  certain  percent- 
age on  the  full  authorized  capital,  but  more  frequently  on  the  paid-up  capital. 

240 


1160-1168 

DOUin.K    ENTRY    BOOK-KEEPING. 

the  reason  being  that  the  larger  percentage-figures  make  (apparently)  a  bet- 
ter showing  to  the  stockholders.  In  effect,  there  is  no  difference  in  the  sum 
each  stockholder  will  receive,  whether  the  dividend  is  declared  upon  the 
former  or  upon  the  latter. 

PATENT  RIGHT  PURCHASED  AND  PAID  FOR  IN  STOCK. 

1160.  A  Compan)'  is  organized  for  the  purpose  of  manufacturing  a  cer- 
tain patented  article — a  churn.  The  style  of  the  concern  is  to  be  "The  Excel- 
sior Churn  Company"  The  authorized  capital  is  $75,000,  divided  into  1,500 
shares  at  $50  each.  The  Company  issues  to  Edwin  F.  Johnson,  the  patentee 
of  the  churn,  1,000  shares  as  payment  for  his  patent.  Additional  shares  to 
the  number  of  400  are  subscribed  for  upon  organization.  The  entries  for  the 
opening  of  the  books  are  as  follows : 

First  Entry: 

Sundries  to  Capital  .Stock $75,000 

Subscription $70,000 


Edwin  F.  Johnson,  1000  shares $50 

\Vm.  II.,Gross,  200       '•     10 

F.S.Caldwell,  100       "     5 

J.W.Matthews,       100       "     5 


Treasury  Stocli 5,000 

100  shares  to  be  sold. 

Second  Entry: 

Patent  Right $50,000 

To  Subscription $50,000 

For  1,000  shares  issued  to  Johnson  for  his  patent. 

1161.     Three  months  after  organization,  the  patentee  returns  to  the  Com- 
pany as  a  bonus,  or  present,  200  shares  of  his  stock.     What  entry.' 

Treasury  Stock $10,000 

To  Patent  Riglit $10,000 

This  entry  reduces  the  cost  of  the  patent  to  $40,000. 

1163.     Machinery  to  the  value  of  $3,000  is  bought  and  paid  for  in  shares. 
What  entries .' 

First  Entry: 

Subscription $3,000 

To  Treasury  Stock 83.0UO 

Pittsburg  Manufacturing  Co.,  60  shares. 

Second  Entry: 

Machinery $3,000 

To  Subscription $3,oco 

For  60  shares  issued  to  The  Pittsburg  Manufacturing  Co.  as  payment  for 
machinery. 

241 


1163 

DOUBLE    ENTRY    BOOK-KEEPING. 

"COMMISSION"  AND    PLANT. 

1163.  1-.  J.  Davison  is  proprietor  of  The  Sterling  Gas  Works.  He,  to- 
gether with  T.  H.  Merriam,  W.  H.  Harrison  and  Geo.  A.  Dougall,  organizes  a 
stock  company  under  the  style  of  The  Sterling  Gas  Company,  with  2,000 
shares  at  $25  a  share.  The  actual  value  of  his  plant  (machinery,  tools,  etc.,;^ 
is  $18,000.  The  agreement  upon  organization  is  that  full  paid-up  certificate!' 
are  to  be  issued  upon  payment  of  60  per  cent,  of  their  nominal  value,  that  is, 
upon  payment  of  $15  for  each  share.  The  Company  thereupon  issues  to 
E.  J.  Davison  1,200  shares  for  his  plant.  The  remaining  shares  are  subscribed 
for  and  are  to  be  at  once  paid  for.     What  entries  > 

First  Entry: 

Subscription $50,000 

To  Capital  Stocli $50,000 

E.J.Davison,     1200  shares $30,000 

T.  H.  Merriam,    300       " 7-5°° 

W.  H.  Harrison,  300       "     7500 

Geo.  A.  Dougall, 200       "     5,000 

$50,000 

Second  Entry: 

Plant $18,000 

To  Subscription $18,000 

For  value   of  The  Sterling  Gas   Works   plant,   formerly   owned   by  E.  J. 
Davison. 
Third  Entry: 

Commission $20,000 

To  Subscription $20,000 

E.  J.  Davison,       40;?  dis.  rn  1200  shares  @  $25 $12,000 

T.  H.  Merriam,         "  300       "         "        3,000 

W.H.Harrison,        "  300       "         "       3,000 

Geo.  A.  Dougall,       "  200       "         "       2,000 

For  40  per  cent,  discount  on  nominal  value  of  2,000  shares  at  $25  a  share, 
paid-up  certificates  being  issued  upon  payment  of  60  per  cent,  of  the  face 
value  of  the  shares,  as  previously  stated. 

Forty  per  cent,  of  $25  is  $  10  ;  therefore,  the  Subscription  account  is  credited 
opposite  to  each  stockholder's  name  with  $10  a  share  for  all  the  shares  held  by 
him,  as  above.  The  difference  between  this  amount  credited  and  the  amount 
debited  is  the  amount  which  has  to  be  paid  for  the  stock. 

When  the  subscriptions  have  all  been  paid  the  Subscription  account  will 
balance;  the  difference  between  the  Commission  and  the  Capital  Stock 
accounts  will  represent  the  paid-up  capital,  or  exactly  what  the  Company  is 
worth.  In  this  example  the  difference  between  these  two  accounts  is  $30,000. 
When  Merriam,  Harrison  and  Dougall  have  paid  their  subscriptions,  the  assets 
to  cover  this  amount  will  consist  of:     Plant,  $18,000;  Cash,  $12,000. 

242 


1164-1166 

DOUBLE    ENTRY    BOOK-KEEI'ING. 

1164.  The  Commission  account  is  allowed  to  stand  in  the  books  as  a 
resource  until  the  Company  has  a  surplus  sufficiently  large  to  cover  it,  when 
it  may  be  "wiped  out"  by  the  followinfj  entry: 

Surplus  Fund $20,ooo 

To  Commission $20,000 

After  this  entry  has  been  made,  the  Capital  Stock  account  will  represent 
not  the  nominal  capital  but  the  real  capital,  and  the  shares  held  by  the  stock- 
holders will  be  worth  their  full  face  value. 

The  term  "Commission"  is  in  more  general  use  than  any  other  for  the 
reason  that  the  real  nature  of  the  account  so  named  is,  to  some  extent,  con- 
cealed in  its  name.  If  the  account  were  called  "Stock  Discount"  it  might 
arouse  suspicion,  because  this  title  would  suggest  that  the  Company's  stock 
was  at  a  discount. 

1165.  No  one  can  tell  from  the  face  of  a  stock  certificate  what  the  cer- 
tificate is  worth,  because  the  nominal  value  only  is  expressed  thereon. 

It  is  usually  specified  upon  the  face  of  a  stock  certificate  by  whom  it  is  to 
be  signed  and  countersigned. 

NOMINAL  CAPITAL. 

1166.  A  Company  is  organized  for  the  purpose  of  purchasing  and  oper- 
ating a  Coal  Mine  at  present  owned  by  Henry  Fox.  The  organizers  are 
Henry  Fox,  Henry  Soper,  B.  E.  Ellison  and  C.  A.  Brady.  The  authorized 
capital  is  $200,000,  divided  into  10,000  shares  at  $20  a  share.  The  private 
understanding  among  the  organizers  is  as  follows :  (i)  fully  paid-up  certifi- 
cates are  to  be  issued  upon  payment  of  fifty  per  cent,  of  the  face  value  of 
the  shares,  or  $lO  a  share  ;  (2)  it  is  to  be  made  to  appear  on  the  Company's 
books  that  the  Company  has  assets  to  the  value  of  $200,000,  that  is,  the  full 
amount  for  which  it  is  incorporated ;  (3)  all  the  stock  is  to  be  at  once  sub- 
scribed for  as  follows, —  Henry  Soper,  750  shares,  B.  E.  Ellison,  500  shares 
C.  A.  Brady,  500  shares  — all  to  be  paid  for  in  cash  at  their  full  face  value; 
•and  Henry  Fox,  8250  shares  as  pa)-ment  for  his  Mine  —  with  the  understand- 
ing that  he  is  to  keep  1500  shares  as  actual  payment  for  it,  to  give  or  transfer 
one  share  to  each  of  the  other  subscribers  (Soper,  Ellison,  and  Brady)  for 
every  share  subscribed  for  by  them,  and  to  return  to  the  Company  to  be  sold 
as  "treasury  stock,"  5000  shares  — total,  10,000  shares.  Thus,  the  fact  that 
the  organizers  obtained  their  stock  for  less  than  its  full  face  value  is 
concealed  on  the  Company's  books.  In  addition  to  the  above  "private 
understanding"  there  is  an  open  statement  in  the  Prospectus  that  12.J  per 
■cent,  of  the  authorized  capital  is  to  be  reserved  for  working  capital  and  that 
this  amount  ($25,000;  is  to  be  taken  out  of  the  cash''$35,ooo  (paid  by  Soper, 
Ellison,  and  Brad\)  for  that  purpose.     What  entries .' 

243 


1167-1168 

DOUBLE   ENTRY   BOOK-KEEPING. 
First  Entry: 

Subscription  to  Sundries $200,000 

Henry  Fox,      8,250  shares $165,000 

Henry  Soper,      750       "     15,000 

B.E.Ellison,      500       "     10,000 

C.A.Brady,       500       "     10,000 

10,000       "     $200,000 

Capital  Stock $175,000 

Working  Capital 25,000 

Second  Entry: 

Mine $165,000 

To  Subscription $165,000 

Issued  to  Henry  Fox,  8,250  shares  @  $20  for  his  mine. 

When  Soper,  Ellison  and  Brady  pay  for  their  stock  the  subscription 
account  will  be  credited  for  the  $35,000  paid  by  them  —  thus  balancing  this 
account.  The  assets  of  the  Company  will  then  appear  on  the  books  as  fol- 
lows :  Mine,  $165,000  (8250  shares  to  Fox  @  $20);  Cash,  $35,000  (received 
from  Soper  for  750  shares  @  $20,  $15,000;  from  Ellison  for  500  shares  @  $20, 
$10,000;  from  Brady  for  500  shares  @  $20,  $10,000)— total,  $200,000.  Of 
this  latter  sum  $175,000  are  credited  to  Capital  Stock  and  the  remaining 
$25,000  to  Working  Capital. 

The  accounts  in  the  Stock  Ledger  upon  the  opening  of  the  books  appear 
as  follows:  Fox,  8,250  shares  ;  Soper,  750  shares  ;  Ellison,  500  shares  ;  and 
Brady,  500  shares  —  total,  10,000  shares.  The  accounts  in  the  Stock  Ledger 
after  the  "private  understanding"  has  been  carried  out  appear  as  follows: 
Fox,  1,500  shares;  Soper,  1,500  shares;  Ellison,  1,000  shares;  Brad)-,  1,000 
shares;  Treasury  Stock,  5,000  shares, — total,  10,000  shares.  When  the  6,750 
shares  are  thus  transferred  from  Fox  to  Soper,  Ellison,  Brady,  and  the  Com- 
pany, each  gives  Fox  the  sum  of  one  dollar  as  consideration  in  order  to  make 
the  transfer  legal. 

1167.  No  entry  is  made  on  the  general  books  for  the  5,000  shares  trans- 
ferred by  Fox  to  the  Company  at  the  time  that  they  are  transferred,  but,  like 
Bonds  (see  1155),  entries  are  made  only  as  they  are  sold,  when  the  proceeds 
of  the  sales  (and  the  shares  are  sold  to  outsiders  for  their  full  face  value)  are 
credited  as  a  gain  (!)  to  one  of  the  following  accounts:  Contingencies,  Com- 
mission, Mine,  or  Loss  and  Gain.  Thus,  owing  to  the  sale  of  these  5,000 
shares,  the  Company  is  enabled  to  declare  (during  the  first  year  of  its  exist- 
ence, at  least !)  dividends  which  are  very  satisfactory  to  the  organizers,  and 
quite  satisfactory  to  the  new  stockholders. 

1168.  The  nominal  capital  is  $200,000 ;  the  actual,  $50,000.  Fox  sells 
his  mine  to  the  Company  for  the  nominal  consideration  of  $165,000;  for  the 
actual  consideration  of  $15,000.  No  one  can  ascertain  from  the  General 
Ledger  how  much  the  actual  capital  is,  nor  how  much  the  actual  considera- 
tion for  the  mine  was  ;  nor  can  any  one  ascertain  either  from  the  general 
books  or  from  the  Stock  Ledger  how  much  Soper,  Ellison  and  Brady  paid  to 
Fox  for  the  shares  transferred  to  them. 

244 


116')— 1173 

DOUBLE    ENTRY    BOOK-KEEPING. 


CAPITAL  STOCK  DECREASED. 


1169.  Paid-Up  Capital.— a  Company  having  a  full  paid-up  capital  of 
$75,000  has  been  in  business  three  years,  during  which  time  there  has  been  a 
loss  of  $25,000.  This  latter  amount  stands  debited  on  the  Surplus  Fund  ac- 
count. Wishing  to  clear  off  this  "eye-sore"  and  start  anew,  the  Company 
decreases  its  capital  stock  to  $50,000.     What  entry  of  the  $25,000.' 

Capital  Stock  to  Surplus  Fund. 

1170.  Subscription. — A  Company  has  an  authorized  capital  of  $200,000, 
all  of  the  stock  representing  which  is  subscribed  for.  At  the  end  of  two  years 
only  $100,000  have  been  paid  on  the  subscriptions  and  consequently  there 
remain  $  100,000  due.  The  Company  now  calls  a  meeting  of  the  stockholders 
at  which  it  is  concluded  to  decrease  the  capital  stock  to  $100,000.  What 
entry  for  this  decrease  .' 

Capital  Stock  to  Subscription. 

1171.  Treasury  Stock.— A  Company  having  an  authorized  capital  of 
$150,000,  has  stock  to  the  value  of  $100,000  subscribed  for  and  paid  up. 
At  the  end  of  two  years,  the  remaining  $50,000  worth  of  stock  in  the  treasury 
not  having  been  sold,  the  Company  decreases  its  capital  stock  to  $ioo,OOG, 
in  order  to  have  a  full  paid-up  capital.     What  entry  of  the  $50,000.? 

Capital  Stock  to  Treasury  Stock. 

1172.  When  capital  stock  is  decreased,  the  old  stock  is  surrendered  by 
the  stockholders  and  new  stock  is  issued  to  them  in  a  number  of  shares  de- 
creased in  the  same  proportion  as  the  capital  stock  is  decreased.  The  old 
accounts  in  the  Stock  Ledger  are  balanced,  and  then  the  entries  for  the  new 
stock  are  made  therein,  showing  the  number  of  shares  of  such  stock  held  by 
each  stockholder. 

"WATERED    STOCK." 

1173.  In  some  States,  certain  kinds  of  Companies  are  required  to  pay  to 
the  State  all  excess  of  profit  over  a  certain  rate  per  cent.  Whenever  a  rail- 
way or  other  Company,  in  order  to  evade  this  obligation,  increases  its  capital 
stock  to  a  sum  sufficiently  large  to  reduce  its  percentage  of  profit  to  the  rate 
limited  by  its  charter,  it  is  "watering  its  stock."  For  example:  The  L.  &  A. 
Railway  Company  has  a  paid-up  capital  of  $i,oco,000;  the  State  wherein  the 
charter  for  this  Company  is  granted  requires  railway  Companies  to  pay  to 
it  all  excess  of  profit  over  6  per  cent,  per  annum ;  it  is  foreseen  that  this 
Company,  with  its  present  capital,  will  earn  during  the  coming  year  at  least 
13  per  cent,  net  profit,  that  is  $60,000  for  itself  and  $60,000  which  should, 
according  to   its  charter,  be   paid  to  the  State.     Now,  in   order  to  defraud 

245 


174-1175 

DOUBLE    ENTRY    BOOK-KEEPING. 

the  State  of  these  $60,000,  the  Company  increases  its  capital  stock  to 
$2,000,000  —  thus  making  the  percentage  of  profit  6  per  cent,  on  $2,000,000 
instead  of  12  per  cent,  on  $1,000,000,  and  thereby  retaining  $120,000  for 
itself  and  paying  to  the  State  nothing. 

1174.  Another  example:  A  gas  company  with  a  capital  stock  of 
$1,000,000,  is,  owing  to  its  high  rates  of  service,  making  a  profit  of  25  per 
cent,  per  annum.  This  Company  increases  its  capital  stock  to  $5,000,000,  its 
object  being  to  make  its  percentage  of  profit  5  percent,  on  $5,000,000  instead 
of  25  per  cent,  on  $1,000,000.  Thus  the  Company  continues  to  keep  the 
public  in  the  light  as  to  its  rates  but  in  the  dark  as  to  its  profits.  Now,  a 
consumer  on  seeing  this  Company's  statement  will  say:  "What,  only  5  per 
cent,  profit !     It  is  useless  to  ask  for  a  reduction  of  rates." 

When  stock  is  thus  "watered,"  the  new  stock  is  usually  distributed  among 
the  old  stockholders  for  merely  a  nominal  consideration. 

FICTITIOUS    DIVIDENDS. 

1175.  A  Company  wishes  to  lead  its  stockholders  to  believe  that  it  is 
"  in  a  prosperous  condition,  when  the  fact  is  the  reverse.     In  order  to  do  this 

it  fraudulently  exaggerates  its  resources  whenever  its  books  are  closed,  and 
actually  declares  dividends  out  of  capital  when  its  shareholders  understand 
that  they  are  declared  out  of  profits.  Consequently,  these  deluded  stock- 
holders are,  in  fact,  withdrawing  the  moneys  which  they  invested  and  thus 
rendering  themselves  liable  to  be  sued,  eventually,  for  the  Company's  debts. 
For  instance:  At  the  beginning  of  the  year  the  "Building"  account  stood 
debited  with  $50,000;  during  the  year  $2,000  have  been  expended  for  repairs 
on  it,  which  amount  has  been  debited  to  Building  account ;  at  the  end  of  the 
year  the  Building  account  is  taken  as  a  resource  at  $52,000,  or  $2,000  more 
than  the  building  cost  when  new  —  no  allowance  having  been  made  for  the 
"wear  and  tear"  which  necessitated  the  repairs.  Thus,  this  item  of  $2,000  is 
kept  out  of  the  Loss  and  Gain  account,  and,  in  consequence,  the  dividend  is, 
by  so  much,  falsely  increased.  (See  96.)  A  great  many  accounts  are  "ma- 
nipulated" in  the  same  manner;  as,  for  instance:  Plant,  Machinery  and 
Tools,  Supplies,  Office  Fixtures,  and  Construction. 

Another  form  of  misrepresenting  resources  is  the  willful  over\aluation 
of  such  property  as  Real  Estate,  Patent  Rights,  Coal  Mines  and  Oil  Wells. 
When  such  property  is  overvalued  the  dividends  are,  by  this  means,  increased 
to  the  extent  of  the  overvaluation,  hence  they  are  —  fictitious  dividends. 


246 


1176-1184 

DOUBLE  ENTRY  HOOK- KEEPING. 


SUNDRY    POINTS. 


1176.  When  a  charter  is  issued  to  a  Stock  Company  one  of  its  condi- 
tions is  that  a  certain  percentaije  of  the  authorized  capital  must  be  paid 
within  a  certain  specified  time.  faiUng  which,  the  charter  becomes  null  and 
void. 

1177.  When  drafting  its  by-laws  a  Stock  Company  must  pay  special  re- 
gard to  consistency  with  the  subject-matter  of  its  charter,  for  the  latter  is 
the  foundation  of  the  Company's  existence  and  all  other  documents  must 
conform  thereto. 

1178.  When  the  stockholders  of  a  Company  are  taxed  for  the  shares 
held  by  them,  the  Company  is  exempt  from  taxation  on  its  real  and  personal 
property,  because  the  shares  represent  the  Company's  assets  and  the  State 
cannot  collect  twice  on  the  same  property. 

1179.  The  reason  why  nearly  all  Companies  require  transfers  of  stock  to 
be  made  through  the  treasurer  of  the  Company,  and  those  transfers  to  be  at 
once  recorded  on  the  Company's  books,  is  because  they  wish  at  all  times  to 
know  who  the  stockholders  are ;  otherwise  they  would  not  know  by  whom 
votes  were  to  be  cast  or  to  whom  dividends  were  to  be  paid. 

Some  Companies  have  to  make  so  large  a  number  of  transfers  that  they 
are  obliged  to  employ  a  person  for  the  special  purpose  of  keeping  the  Trans- 
fer Book.     The  person  thus  employed  is  called  a  Transfer  Clerk. 

1180.  A  "call  loan"  is  a  loan  which  is  made  to  a  person  who  gives  col- 
lateral security  in  a  sum  which  is  often  as  much  as  20  per  cent,  in  excess  of 
the  amount  of  the  loan,  and  who  promises  to  pay  at  any  time  the  lender 
may  demand  payment.  When  the  lender  wishes  the  money  on  his  loan  he 
"calls  it  in,"  together  with  the  interest  which  has  accrued  thereon,  and,  upon 
payment  of  both  loan  and  interest,  the  securities  are  returned.  Money 
thus  lent  is  usually  charged  to  a  "Loan"  account. 

11  SI.  Each  stockholder  in  a  National  l^ank  is  liable  for  twice  the 
nominal  value  of  the  shares  held  by  him,  while  in  banks  other  than  National 
Banks,  each  stockholder  is  liable  for  only  the  nominal  value  of  his  shares. 

1182.  A  limited-liability  Company  is  always  good  for  liabilities  to  the 
extent  of  its  full  authorized  capital,  while  a  partnership  concern  may  not  be 
good  for  ID  per  cent,  of  the  sum  which  it  is  supposed  to  be  worth. 

1183.  When  a  limited -liability  Company  fails,  and  is  sued,  it  is  not  a 
question  as  to  how  much  of  the  capital  stock  has  been  paid  up,  but  as  to 
how  much  has  been  subscribed  for,  and  the  total  subscription  is  the  sum  for 
which  the  Compan\',  or  its  stockholders,  can  be  held  liable. 

1184.  A  stockholder  in  a  limited-liability  Company  is  ahva\s  liable  to 
the  creditors  of  his  Compan\'  for  the  full  nominal  or  face  value  of  the  shares 
held  by  him,  regardless  of  the  amount  which  he  may  have  been  required  to 
pay  for  them,  and  this  liability  continues  as  long  as  his  name  remains  on  the 
books  of  the  Company  as  a  stockholder.     In  some  States  this  liability  contin- 

247 


1185-1187 


DOUBLE    ENTRY    BOOK-KEEPING. 


ues  for  six  months  after  he  ceases  to  be  a  stockholder.  This  is  one  of  the 
reasons  why  Stock  Companies  require  that  all  transfers  of  their  stock  be  im- 
mediately recorded  upon  their  books. 

1185.  The  only  advantage  that  an  unlimited-liability  Company  possesses 
over  a  limited-liability  Company,  to  compensate  for  the  extra  risk  which  the 
stockholders  of  the  former  incur  by  each  becoming  surety  for  the  full  liability 
of  the  Company,  consists  of  the  higher  standing  of  the  unlimited  Company 
respecting  its  credit.  If  a  limited-liability  Company  with  a  capital  of  $iOO,- 
GOO  should  contract  liabilities  to  the  extent  of  $200,000  and  then  fail,  its 
creditors  could  collect  from  its  stockholders  only  $ioo,ooo — collecting  from 
each  stockholder  only  the  nominal  value  of  the  shares  held  by  him.  If  an 
unlimited-liability  Company  should  fail,  its  creditors  could  collect  from  any 
stockholder  who  might  be  able  to  pay  it,  the  total  amount  of  the  Company's 
liabilities, — hence  the  greater  degree  of  credit  attaching  to  an  unlimited- 
liability  Company. 

1186.  Officers  of  Stock  Companies  are  required  to  file  with  the  Secretary 
of  State,  as  also,  in  some  States,  with  the  Town  Clerk,  and  in  others,  with  the 
County  Clerk,  reports  or  "statements  of  condition,"  giving  particulars  as  to 
paid-up  capital,  assets  and  liabilities,  surplus,  and  dividends.  The  officers  by 
whom,  and  the  officers  with  whom,  as  well  as  the  dates  within  which  these 
reports  are  required  to  be  filed  vary  according  to  the  laws  of  different  States. 
In  some  States  the  publishing  of  these  reports  in  a  local  newspaper  is  also 
required. 

SUNDRY    FORMS. 

STOCK   SUBSCRIPTION   BOOK. 


1187.     We,   the   undersigned,   do   hereby  agree   to  take  the 
shares  set  opposite  to  our  several  names: 


lumber  of 


248 


DOUBLE   ENTRY   BOOK-KEEPINC. 


1187a 


^ 


is 


249 


1187b— 1187d 


DOUBLE   ENTRY   BOOK-KEEPING. 


1187b.  Printed  across  the  back  of  each  Stock  Certificate  is  the  following 
form,  which  is  filled  in  whenever  a  part  or  the  whole  of  the  shares  represented 
by  the  Certificate  are  sold. 

For  value  received,  hereby  assign  and  transfer  unto _ 

._ _ share of  the  Capital  Stock  represented  by  the  within 

Certificate,  and  do  hereby  cofistitute  and  appoint 

Attorney,  to  transfer  the  said  stock  on  the  books  of  the  within  named  Cotnpany, 
with  full  power  of  substitution  in  the  premises. 


Date. 

Signed  in  the  presence  of 


.18....... 


11S7C.                       STOCK   TRANSFER   BOOK. 
Certificate  Number for shares  transferred  to 


Transfer  Number 

For  value  received. hereby  assign  and  transfer  unto - 

all right,  title  and  interest  in  shares  of  the  Capital  Stock 

fff now  standing  on  its  books  in name. 


Dated  this day  of      18 

Surrender  and  Reissue  Entries  made  on  pages... 


1187(1.  DIVIDEND   RECEIPT  BOOK. 

Dividend  Number of  % ,  Declared 


.18... 


No.  of         Amount  of  Date  of 


250 


1187e 


DOUBLE   ENTRY   BOOK-KEEPING. 


1187e. 


STOCK    LEDGER 
Horace  Cook. 


Date. 

Certificate 

Transfer 

Number. 

Number. 

1887 

Jan. 

a 

I 

1      May 

16 

3 

To  Whom  Transferred. 


Issued.        Transferred. 


This  Ledger  is  kept  upon  the  same  principle  as  the  Balance-Ledger 
illustrated  and  described  in  11 12.  Since  the  special  design  of  the  Stock 
Ledger  is  to  show  the  number  of  shares  held  by  each  stockholder,  the  issuing 
and  transferring  of  shares  is  hardly  a  matter  of  debit  and  credit,  but  rather  a 
matter  of  the  increase  and  decrease  of  the  number  of  shares  held  by  each 
stockholder;  therefore,  the  form  given  above  will  be  found  to  answer  the 
purpose  of  a  Stock  Ledger  better  than  the  old  form  of  Ledger  with  debit  and 
credit  sides. 

The  figures  on  the  last  line  in  the  "Balance  of  Shares  Held"  column 
always  show  the  number  of  shares  held  b)-  the  stockholder.  This  renders  it 
unnecessary  to  add  the  figures  in  the  "Issued"  and  "Transferred"  columns 
separately  and  to  subtract  the  footing  of  the  one  from  the  other,  as  is  required 
in  the  common  form  of  Ledger. 

When  this  transfer  of  75  shares  has  been  made  to  Ellison,  an  account  is 
opened  with  him  in  the  same  manner  as  the  account  with  Cook  was  opened. 
When  only  a  part  of  the  shares  represented  on  a  stock  certificate  are  sold  it 
is  unnecessary  for  the  holder  of  such  certificate  to  appear  at  the  Company's' 
office  to  surrender  it,  but  he  may  endorse  on  the  back  of  it  the  number  of 
shares  sold,  and  appoint  the  Transfer  Clerk  his  attorney  to  make  the  transfer 
on  the  Company's  books  and  to  obtain  for  the  purchaser  a  new  certificate  for 
the  number  of  shares  sold  to  him.  The  old  certificate  is  then  canceled  and  a 
new  one  issued  to  the  old  stockholder  for  the  number  of  shares  still  held  by 
him.  In  this  case,  therefore,  Ellison's  certificate  is  number  9,  wiiile  that  of 
Cook's  re-issue  is  number  10. 

When  all  the  shares  represented  in  a  stockholder's  certificate  are  sold  it 
is  not  necessary  for  him  to  appear  at  the  Company's  office,  but  he  may  assign 
and  transfer  his  certificate  to  another  person  by  endorsing  it  in  the  manner 
shown  in  \\%jb.  The  purchaser  of  the  certificate  thus  endorsed,  can  take  it, 
at  his  convenience,  to  the  Company  whose  stock  it  represents,  surrender  it 
and  get  a  new  certificate  in  his  own  name.     When  the  purchaser  thus  sur- 


251 


DOUBLE   ENTRY   BOOK-KEEPING. 

renders  his  certificate,  the  blank  form  shown  in  1187^  is  filled  up  and  signed 
by  him.    He  also  signs  the  stub  of  1187a  for  the  new  certificate  issued  to  him. 

It  is  now  considered  unnecessary  to  indicate  in  the  Stock  Ledger  the  par 
value  of  the  shares.     (See  827.) 

Some  Companies  place  all  their  stock  in  the  hands  of  a  trustee  who  trans- 
fers it  to  the  subscribers.  In  such  a  case,  the  first  account  to  be  opened  in 
the  Stock  Ledger  is  in  the  name  of  the  trustee.  The  trustee's  account  is 
then  treated  in  the  same  manner  as  that  of  a  stockholder.  When  all  the 
stock  is  issued  to  subscribers  the  trustee's  account  will  be  closed. 

VARIOUS   STATUTORY   POINTS. 

1188.  There  are  many  special  features  governing  .corporations  to  be 
found  in  the  statutes  of  the  different  States,  a  few  of  which  may  be  men- 
tioned as  follows : 

(i.)  In  Al.\BAMA,  subscription  of  half  the  proposed  capital,  payment  of 
at  least  twenty  per  cent,  of  subscription,  and  security  for  the  remainder  of 
subscription  are  required  before  any  Company  is  allowed  to  do  business. 

(2.)  In  COXNECTICUT,  when  an  insolvent  Company  has  omitted  to  file  its 
annual  report  for  two  successive  years,  it  may  be  dissolved  and  its  affairs 
wound  up  on  the  application  of  any  stockholder  or  creditor;  in  MASSACHU- 
SETTS, on  the  application  of  the  Commissioner  of  Corporations. 

(3.)  In  Idaho,  each  stockholder  is  personally  liable  for  his  proportionate 
share  of  the  debts  of  the  Company  which  were  contracted  while  he  held  its 
stock. 

(4.)  In  Illinois,  when  a  Company  fails  and  any  stockholder  is  insolvent, 
his  share  is  borne  pro  rata  by  the  solvent  stockholders. 

(5.)  In  Indiana,  the  capital  stock  of  manufacturing  Companies  must  be 
fully  paid  up  within  eighteen  months  after  the  granting  of  the  charter.  This 
capital  may  be  increased  or  diminished  without  application  to  the  Secretary 
of  State  ;  but,  in  case  of  an  increase,  a  certificate  to  that  effect  must  be  filed 
within  thirty  days  with  the  Circuit  Court  clerk,  and,  in  the  case  of  a  decrease, 
with  both  the  Circuit  Court  clerk  and  the  Secretary  of  State. 

(6.)  In  Maine,  each  Company  is  required  to  send  to  the  Secretary  of 
State  an  annual  list  of  its  new  stockholders. 

(7.)  In  MassACHUSKTTS,  no  Company  is  allowed  to  do  business  until  its 
capital  stock  is  fully  paid  up. 

(8.)  In  Mississippi,  officers  of  a  Company  who  assent  to  the  taking  of  a 
note  from  a  stockholder  in  payment  for  stock  are  personally  liable  to  its  cred- 
itors for  the  amount  of  such  note. 

(9.)  In  Mississippi,  the  liability  of  stockholders  continues  for  one  year 
after  the  sale  or  transfer  of  their  stock ;    in  SOUTH  CAROLINA,  for  two  years. 

Cio.j  In  Missouri,  Stock  Companies  are  required  to  make  a  statement 
of  condition  only  when  they  apply  for  an  increase  or  a  decrease  of  their 
capital  stock. 

2S2 


1188 

DOUBLE   ENTRY   BOOK-KEEPING. 

(II.)  In  New  Hampshire,  the  capital  stock  of  a  Company  must  not  be 
less  than  $i,000,  nor  more  than  $1,000,000;  in  VERMONT,  not  less  than  $500, 
nor  more  than  $1,000,000. 

(12.)  In  New  York,  one-half  of  the  capital  stock  of  a  Company- 
must  be  paid  within  one  year  after  the  grantinij  of  the  charter  and  the  other 
half  within  two  years  after  its  granting-,  failing  which,  the  Company  will 
be  dis.solved.  Every  Company  is  required  to  keep  open  for  the  inspection  of 
stockholders  and  creditors,  a  book  showing  the  names  of  its  stockholders 
alphabetically  arranged,  the  number  of  shares  held  by  each,  and  the  amount 
paid  thereon. 

(13.)  In  Ohio,  each  stockholder  is  liable  for  twice  the  face  value  of  the 
shares  held  by  him ;  in  SOUTH  CaR0LIN.\,  for  the  face  value  and  ten  per  cent, 
in  addition. 

(14.)  In  Vermont,  no  Company  is  allowed  to  contract  debts  until  half  of 
its  capital  stock  is  paid  up. 

(15.)  In  Idaho,  Illinois,  Massachusetts  and  Ni-:w  York,  directors, 
trustees,  or  other  officers  who  assent  to  an  excess  of  debt  over  the  paid  up 
capital,  are  jointly  and  severally  liable  to  the  creditors  of  their  Company  for 
the  whole  of  such  excess ;  in  New  Hampshire,  officers  who  assent  to  an 
excess  of  debt  over  one-half  of  the  paid  up  capital  are  liable  for  such  excess ; 
in  Vermont,  those  who  assent  to  an  excess  of  debt  over  two-thirds  of  the 
paid-up  capital  are  liable  for  such  excess. 

(16.)  In  Kansas  and  Mississippi,  stockholders  are  liable  for  the  face 
value  of  the  stock  held  by  them  plus  the  amounts  of  their  unpaid  subscrip- 
tions. 

(17.)  In  Massachusetts,  Michigan  and  New  Hampshire,  the  name  of 
each  stockholder  as  well  as  the  number  of  shares  held  by  him  is  required  to 
be  shown  in  the  annual  statement. 

(18.)  In  Massachusetts,  Mississippi,  Missouri 'and  Montana,  direct- 
ors assenting  to  a  loan  to  a  stockholder  are  liable  to  the  creditors  of  their 
Company  for  the  amount  of  that  loan  in  addition  to  their  other  liabilities. 

(19.)  In  Montana,  New  York  and  Oregon,  no  fewer  than  three  per- 
sons can  incorporate  a  Company. 

(20.)  In  New  Hampshire  and  Rhode  Island,  each  stockholder  of  a 
Company  is  liable  for  all  its  debts  until  the  capital  stock  is  fully  paid  up ;  in 
New  York  and  Vermont,  for  the  face  value  of  his  shares  only. 

(21.)  In  Alabama,  Connecticut,  Delaware,  Indiana,  Kentucky, 
Louisiana,  Maine,  Maryland,  Missouri,  Montana,  Oregon,  Texas. 
Utah,  Virginia  and  West  Virginia,  each  stockholder  is  liable  for  only  the 
unpaid  part  of  his  subscription. 

(22.)  In  Alabama,  Delaware,  Idaho,  Illinois,  Kentucky,  Louisiana, 
Maine,  North  Carolina,*  Ohio,  Pennsylvania,  South  Carolina.  Te.xas, 
Utah,  Virginia,  West  Virginia  and  Wisconsin,  no  statements  of  condi- 
tion are  required  to  be  filed  or  published. 

2^3. 


[189 

DOUBLE    ENTRY    BOOK-KEEPIXG. 

(23.)  In  Connecticut,  Florida.  Indiana,  Maryland,  Massachu- 
setts, Michigan,  Montana,  New  Hampshire,  New  York  and  Tennessee, 
if  directors  with  the  knowledge  that  their  Company  is  insolvent,  or  that 
the  declaration  and  payment  of  a  dividend  will  render  it  insolvent,  declare 
and  pay  such  dividend,  the  directors  assenting  thereto  are  jointly  and 
severally  liable  for  all  debts  then  existing  as  well  as  for  all  those  which  may 
subsequently  be  contracted  while  they  continue  in  office. 


Since  the  laws  of  the  various  States  differ  so  widely  from  each  other, 
officers  of  every  Stock  Company,  in  order  to  conform  to  the  laws  of  their  State, 
should  possess  a  copy  of  the  statutes  covering  "Corporations." 


PURCHASES  AND  SALES. 

1189.  In  order  to  ascertain  what  the  exact  net  purchases  and  the  exact 
net  sales  are,  it  is  necessary  to  keep  the  purchases  and  sales  in  separate 
accounts.  When  this  is  required,  it  is  here  suggested  that  three  accounts  be 
kept,  namely :  Merchandise,  Purchases,  and  Sales.  Merchandise :  debit 
"Merchandise"  at  the  beginning  of  the  year  with  the  amount  of  the  inventor\\ 
Purchases :  debit  "Purchases"  during  the  year  for  all  goods  purchased  by  us; 
credit  it  for  all  goods  returned  by  us,  for  all  allowances  to  us  for  overcharge, 
and  for  all  discounts  for  cash  ;  balance  either  monthly  or  yearly  "By  Mdse.," 
and  carry  the  net  purchases,  thus  ascertained,  to  the  debit  side  of  the  Mer- 
chandise account.  Sales:  credit  "  Sales"  during  the  year  for  all  goods  sold 
by  us  ;  debit  it  for  all  goods  returned  to  us,  for  all  allowances  made  to  cus- 
tomers for  overcharges  on  goods  sold  to  them,  and  for  all  discounts  for  cash 
on  the  same;  balance  either  monthly  or  yearly  "To  Mdse.,"  and  carry  the 
net  sales,  thus  ascertained,  to  the  credit  side  of  the  Merchandise  account. 
Merchandise :  Now,  the  amounts  entered  on  the  Merchandise  account  show 
the  actual  net  purchases  and  the  actual  net  sales.  Such  items  as  goods 
returned,  allowances  for  overcharges,  errors  in  bills,  and  discounts  for  cash 
on  goods  purchased  have  been  deducted  from  the  purchases  and  not  added 
to  the  sales ;  such  items  as  the  above  mentioned  on  goods  sold  have  been 
deducted  from  the  sales  and  not  added  to  the  purchases.  This  manner  of 
thus  subdividing  the  Merchandise  account  does  not,  of  course,  alter  the 
general  result  of  the  net  gain  on  Merchandise  ;  but  it  does  afford  the  means 
of  ascertaining  the  exact  percentage  of  profit  on  sales,  which  cannot  be  ascer- 
tained when  only  a  ;\Ierchandise  account  is  kept. 


254 


1190-1194 

DOUBLE   ENTRY   BOOK-KEEPING. 


SET  OP  EXAMri.ES  FOR  PRACTICE. 

1190.  Purchasers  of  this  book  who  desire  to  have  examples  upon  which 
to  practice  the  system  herein  illustrated,  and  with  which  to  test  their  knowl- 
edge of  book-keeping  as  acquired  from  this  book,  will  find  that  the  following 
set  of  examples  contain  a  sufficient  number  and  variety  of  transactions  to 
answer  the  purpose.  The  student  who  writes  up  this  "set"  and  succeeds  in 
obtaining  the  proper  result,  should  have  no  hesitation  in  taking  charge  of 
any  set  of  books  which  may  be  offered  to  him. 

1191.  It  will  be  seen  in  the  examples  which  follow  that,  instead  of  saying, 
for  instance,  We  receive  a  note,  or.  We  give  a  note,  the  form  of  the  note  is 
given,  and  that  from  this  the  student  must  make  the  proper  entry.  He  thus 
becomes  at  once  familiar  with  the  different  forms  of  papers  which  are  used. 
Each  "form"  here  given  is  preceded  by  a  paragraph-number,  so  that  when  any 
paper  is  stated  to  be  paid,  it  may  be  referred  to  by  this  number  instead 
of  by  repeating  the  form.  Whenever  any  such  paper  is  paid  it  is  not  said 
whether  we  pay  it  or  they  pay  it,  but  simply  that  it  is  paid,  —  thus  putting  the 
student  to  a  more  thorough  test  of  his  ability  by  requiring  him  to  judge  from 
the  reading  of  the  paper  whether  we  pay  it  or  they  pay  it,  and  then  to  make 
the  entry  accordingly.  In  the  following  set  the  name  of  the  firm  will  be  Boyer 
&  Lundie.  The  student  should  imagine  himself  to  be  the  book-keeper  for  this 
firm,  and  always  bear  this  in  mind,  so  that  whenever  he  has  any  transaction 
arising  from  one  of  the  papers  above  referred  to  he  will  be  able  to  determine 
whether  it  is  payable  Aj'his  firm  or  to  his  firm.  All  signatures  to  these  papers 
will  be  printed  in  italics,  for  the  purpose  of  distinguishing  the  drawers  jind 
endorsers  of  them  from  the  persons  to  whom  they  are  made  payable  or  upon 
whom  they  are  drawn. 

In  order  to  economize  space,  the  complete  forms  of  such  papers  are  not 
given  in  these  examples,  but  such  terms  as  "  per  annum,"  and  "value  received;" 
as  likewise  the  amounts  in  letters,  as,  for  instance,  "two  thousand  dollars," 
are  omitted. 

1192.  Checks,  bank  drafts,  etc.,  are,  like  notes  and  acceptances,  preceded 
by  paragraph-numbers;  for,  if  they  were  not,  the  student  would  thus  have 
clearly  pointed  out  to  him  which  papers  belong  to  the  Bills  Receivable  and 
Bills  Payable  accounts. 

1193.  Wlierever  the  name,  "J.  H.  Goodwin"  appears  throughout  this  set, 
the  student  should  substitute  his  own  name. 

1194.  The  place  of  business  is  Denver,  Colorado,  and  the  year  is  1883. 
The  business  is  that  of  a  retail  grocery.  The  months,  January,  February,  and 
March  are  supposed  each  to  represent  a  year,  but  only,  however,  in  so  far  as 
the  closing  of  the  books  is  concerned;  therefore, the  books  should  be  closed 
at  the  end  of  each  month  in  the  same  manner  as  though  it  were  the  end  of  a 
year.     In  order  that  the  student  may  know  whether  his  work  is  correct  before 


1195—1200 

DOUBLE   ENTRY   BOOK-KEEPING. 

he  closes  the  Loss  and  Gain,  Private  and  Stock  accounts,  the  net-result  figures 
for  each  closing  of  the  books  will  be  given  at  the  end  of  each  "year." 

1195.  When  the  student  is  not  certain  as  to  what  entry  to  make  for  any 
transaction,  he  should  refer  to  the  Index  of  this  book  and  follow  up  all  the 
references  pertaining  to  the  subject.  He  will  then,  in  all  probability,  find 
a  way  out  of  his  difficulty. 

1196.  In  order  to  have  paper  which  is  ruled  according  to  the  system 
illustrated  in  this  book,  upon  which  to  write  up  this  set,  the  student  should 
procure  "Goodwin's  Practice  Blanks."  (Price,  7;  centi^.)  In  order  that  he  may 
allow  the  proper  number  of  lines  to  each  account  in  the  Ledger,  the  names  of 
the  accounts  which  he  should  open  will  be  given,  together  with  the  number 
of  the  page  and  also  of  the  line  upon  which  each  should  be  written.  The 
first  figure  after  the  name  of  an  account  indicates  the  page,  and  the  second 
figure  the  number  of  lines  below  the  head-line  upon  which  the  name  of  the 
account  is  to  be  written.  When  "top"  follows  a  page-figure,  the  name  of  the 
account  should  be  written  on  the  blue  line  above  the  red  head-line. 

1197.  The  accounts  to  be  opened  for  January  are  as  follows:  W.  D. 
Boyer,  Stock,  I— top;  C.  M.  Lundie,  Stock,  I  — 17;  W.  D.  Boyer,  Private, 
2 — top;  C.  M.  Lundie,  Private,  2 — 19;  Merchandise,  3 — top;  Store  &  Office 
Fixtures,    3  —  26;    Expense,   5— top;    Freight   &  Express,   5  — 15;    Salaries, 

5  —  35;  Interest,  6  —  top,  Advertising,  6 — 14;  Insurance,  6  —  24;  Loss  &  Gain, 
II — top;  Bills  Receivable,  12 — top;  Bills  Payable,  13  —  top;  Charles  Daven- 
port, City,  14  —  top;  Paul  Philip,  City,  14  —  9;  Wm.  Dougherty,  Golden,  Colo., 
14 —  17;  Wm.  S.  Farley,  City,  16 — 41 ;  Sprague,  Warner  &  Co.,  City,  17  —  top; 
B.  Cornforth,  City,  17—17;  J.  S.  Brown  &  Bro.,  City,  17  —  29;  J.  K.  Armsby 

6  Co.,  Chicago,  17  —  36;  B.  T.  Babbitt,  New  York,  18  — top;  Catlin  Tobacco 
Co.,  St.  Louis,  18—9;  Thatchers  &  Baxter,  Pueblo,  Colo.,  18  —  21. 

1198.  Whenever  an  account  is  opened  in  the  Ledger,  its  name  and  page 
should  be  written  in  the  Index  in  the  manner  shown  in  "Goodwin's  Ledger 
Practice  Blank"  under  "A"  and  "B". 

1 1 99.  Whenever  a  transaction  consists  of  an  item  of  expense,  the  student 
should  refer  to  the  Index  in  his  Ledger  to  ascertain  whether  an  account  has 
not  been  opened  for  that  particular  branch  of  expense  to  which  the  item 
belongs.  If  such  an  account  has  been  opened  this  item  should  be  charged 
thereto.     (See  193  to  197.) 

JANUARY,   1S83. 

1200.  During  this  "  year"  all  charge  sales  are  itemized  in  the  Journal,  no 
Sales  Books  being  kept.  Employes  are  paid  their  salaries  weekly ;  conse- 
quently, no  accounts  are  kept  with  them.  There  are  two  employes, — 
yourself  as  book-keeper,  at  a  salary  of  $12  a  week,  and  Frank  Cook  as  clerk, 
at  $8  a  week. 

1st. — W.  D.  Boyer  and  C.  M.  Lundie  have  this  day  entered  into  copart- 
nership for  the  purpose  of  transacting  a  Retail  Grocery  Business.     The  style 

2S6 


1201-1205 

DOUBLE   ENTRY   BOOK-KKEI'ING. 

of  the  firm  is  to  be  "  Beyer  &  Lundie."  The  gains  and  losses  are  to  be  shared 
equally.  W.  D.  Boyer  invests  as  follows:  currency,  $1500;  gold,  $35°; 
groceries  on  hand,  per  inventory,  $1550;  desks,  chairs  and  stove,  $100. 
C.  M.  Lundie,  invests  as  follows : 

liOl.  Denver,  Colo.,  Jan.  i,  18S3. 

FIRST  NATIONAL  IJANK. 
Pay  to  Boyer  &  Lundie  or  order  $2000. 

C.  M.  Lundie. 

1202.  Denver,  Colo.,  Dec.  25,  1882. 
Thirty  days  after  date  I  promise  to  pay  to  the  order  of 

C.  M.  Lundie  $400,  with  interest  at  10  per  cent. 

Arthur  Borden. 

Endorsement  on  above: 

"  Pay  order  of  Boyer  &  Lundie. 

C.  M.  Lundie,^^ 

1203.  Whenever  a  dash  follows  a  form,  as  after  "Arthur  Borden"  above, 
it  indicates  that  the  transaction  is  not  complete  without  the  words  which 
follow  it. 

1201.  Denver,  Colo.,  Dec.  25,  18S2. 

Forty-five  days  after  date  I  promise  to  pay  to  the  order 
of  C.  M.  Lundie  $600,  with  interest  at  10  per  cent. 

Arthur  Borden. 

Endorsement  on  above  : 

"  Pay  order  of  Boyer  &  Lundie. 

C.  M.  Lundie." 

1205.  Golden,  Colo.,  Dec.  25,  1S82. 

Sixty  days  after  date  I  promise  to  pay  to  the   order  of 
C.  M.  Lundie  $500,  with  interest  at  lo  per  cent. 

Geo.  A.  Turner. 

Endorsement  on  above : 

"Pay  order  of  Boyer  &  Lundie. 

C.  M.  Lundie." 

We  pay  for  rent  of  store  to  Feb.  I,  $75;  for  note,  bill  and  letter  heads, 
$9;  for  2  desks,  $40;  for  4  chairs,  $10.  (Always  make  the  entries  and  explan- 
ations in  the  Cash  Book  as  concise  as  possible — never  extendinjj  an  explana- 
tion on  to  a  second  line.) 

2d. — We  pay  for  advertisement  in  "News,"  $7;  for  2  tons  coal,  $9;  for 
bill  of  stationery,  $5.50. 

3d. — We  buy  goods  on  account  from  Sprague,  Warner  &  Co.,  1/2  (this 
fractional  form  indicates  the  date  of  the  bill,  which  is  the  ist  month  and  2d 
day,  or,  Jan.  2),  $1234;  J.  S.  Brown  &  Bro.,  1/2,  $428.75;  B.  Cornforth, 
'/3.  $137.25— total,  $1800. 


206—1310 

DOUBLE   ENTRY   BOOK-KEEPING. 

4th. — We  pay  for  sign,  "  Boyer  &  Lundie,  GroCers,"  $30;  for  set  of  blank 
books,  $27.50.     W.  D.  Boyer  draws  for  private  use,  $15. 

5th. — On  this  day  we  throw  open  our  doors  for  trade,  and  the  result  at 
night  is,  cash  sales,  $57.  We  pay  for  a  policy  in  the  Hartford  Insurance  Co., 
I  per  cent  on  $2500,  $25;  for  subscription  to  "The  Denver  Republican"  one 
month,  $1. 

6th. — We  sell  to  Chas.  Davenport  on  account,  i  bag  No.  6  Coffee,  132  lbs. 
@  22.^c.,  $29.70;  I  bbl.  XX  Flour,  $8;  i  Cheese,  60  lbs.  frtj  13c.,  $7.80— total, 
$45.50. 

8th. — Cash  sales,  $92.80.  (Cash  sales  are  made,  of  course,  every  day,  but 
owing  to  the  number  of  lines  on  the  Cash  Book  which  these  would  take  up  if 
they  were  given  for  every  day  in  this  set  of  examples,  they  will  be  given  only 
occasionally,  when  the  sales  for  several  days  will  be  included  in  the  amounts 
stated.)  C.  M.  Lundie  draws  for  private  use,  $20.  You  draw  your  salary  for 
the  week  as  book-keeper,  $12;  Frank  Cook  is  paid  his  salary  for  the 
week,  $8.     (Sec  203.) 

9th.  —  We  sell  to  Chas.  Davenport  on  account,  10  bbls.  Salt  @  $2.50,  $25; 
5  bbls.  Apples  @  $3>  $ 1 5  —  total,  $40.  . 

1206.  Denver,  Colo.,  Jan.  9,  1883. 
COLORADO  NATIONAL  BANK 

Pay  to  the  order  of  Sprague,  Warner  &  Co.  $234. 

Boyer  (5^  Lundie. 

1207.  Denver,  Colo.,  Jan.  9,  1SS3. 
Sixty  days  after  date  we  promise  to  pay  to  the  order  of 

Sprague,  Warner  &  Co.  8450. 

Boyer  &^  Ltimiie. 

1208.  Denver,  Colo.,  Jan.  9,  18S3. 
Seventy-five   days  after  date  we  promise  to  pay  to  the 

order  of  Sprague,  Warner  &  Co.   $550. 

Boyer  &-  Lundie. 

1209.  Wherever  there  is  nothing  either  preceding  or  following  a  paper 
to  indicate  for  what  purpose  the  paper  is  issued,  it  will  be  understood  that 
the  amount  of  it  is  to  be  applied  07i  account. 

loth. — Cash  sales,  $106.50.  Wm.  S.  Farley  (carpenter)  makes  for  us,  on 
account,  some  new  counters  and  shelves,  $75.  We  return  to  B.  Cornforth  3 
bbls.  Apples  which  are  spoiled  and  which  were  charged  to  us  in  his  bill  of 
Jan.  3  @  $2.25,  $6.75. 

nth.  —  We  buy  from  ¥..  Hall  a  safe,  and  give  him  for  it  the  following 
paper: 

1210.  Denver,  Colo.,  Jan.  11,  18S3. 
Seventy-five  days  after  date  we  promise  to  pay  to  the 

order  of  E.  Hall  $150. 

Boyer  if  Lundie. 

Cash  sales,  $137. 

2S8 


1211-1214 


DOUULK    KNTkV    BOOK-KLEl'IM;. 

1211.  Denver,  Colo.,  Jan.  II, 

COLORADO  NATIONAL  BANK 
Pay  to  the  order  of  15.  Coriiforth  $130.50. 


I2th. — We  pay  for  a  pair  of  shoes  for  W.  I).  Hover,  $8. 

1212.  Denver,  Colo.,  Jan.  12,  1883. 
Sixty  days  after  date  I  promise  to  pay  to  the  order  ot 

Boyer  &  Lundie  $85.50.  Chas.  Davenport. 

Cash  sales,  $142. 

13th. — We  buy  goods  on  account  from  J.  K.  Armsby  &  Co.,  Chicago,  1/8, 
$91  ;  B.  T.  Babbitt,  New  York,  1/2,  $85.60;  Catlin  Tobacco  Co.,  St.  Louis, 
1/6,  $123.40;  B.  Cornforth,  1/12,  $214.20  — total,  $514.20.  We  pay  for 
freight  on  these  goods,  on  D.  &  N.  O.  R.  R.,  $6.20;  on  U.  P.  R.  R.,  $9.50; 
for  drayage  on  same  to  store,  75c. —  total,  $16.45. 

1213.  15th.  St.  Louis,  Mo.,  Jan.  6,  1SS3. 

Thirty   days   after  date  pay  to   the   order  of  ourselves 
$123.40,  and  charge  the  same  to  account  ol 

Catlin  Tobacco  Co. 

To  Boyer  &  Lundie,  ) 

Denver,  Colorado.  \ 

Written  across  tlie  face  of  above  in  red  ink  is  : 

"Accepted.     Denver,  Colo.,  Jan.  15,  18S3.     Boyer  ^f  Lundie." 

Cash  sales,  $148.30.  The  book-keeper  draws  his  salary,  $12;  we  pay 
Frank  Cook,  clerk,  $8. 

l6th. — We  buy  for  cash  20  bbls.  Apples  @  $2,  $40.  We  pay  for  postage 
stamps,  $5;  for  ink,  75c.     Cash  sales,  $135.10. 

17th. — We  sell  to  Paul  Philip  on  account,  16  lbs.  A  Sugar,  $2;  5  bbls. 
Apples  @  $2.50,  $12.50;  I  box  Layer  Raisins,  $4;  5  lt)s.  Y.  H.  Tea  @  90c., 
$4.50 — total,  $23.  We  pay  for  2000  printed  statements,  $4.50.  Cash  sales, 
$128.50. 

igth. — We  buy  goods  on  account  from  J.  K.  Armsby  &  Co.,  l/io,  $82.20, 
1/12,  $40.80;  Spraguc,  Warner  &  Co.,  1/ 12,  $285.40,  1/ 16,  $1 14.60;  —  total, 
$523.     We  pay  freight,  U.  P.,  $380;  dra\-,  50c.— total,  $4.30. 

1214.  Denver,  Colo.,  Jan.  2,  1883. 
Sixty  days  after  date  we  promise  to  pay  to  the  order  of 

B.  T.  Babbitt  $85.60.  Boyer  &-  Lundie. 

19th.  —  We  pay  for  show  case,  $12.50;  for  set  of  Fairbank's  scales,  $35. 
C  M.  Lundie  draws  $15.     Cash  sales,  $124.90. 

259 


1216-1216 

DOUBLE   ENTRY    BOOK-KEEPING. 

20th.  —  Paul  Philip  returns  to  us  i  bbl.  Apples  spoiled,  for  which  we  charged 
him  on  Jan.  17th,  $2.50.  B.  Cornforth  overcharged  us  in  his  bill  of  Jan.  12, 
ic.  a  pound  on  130  lbs.  dried  currants,  for  which  overcharge  we  now  make  an 
entry  of  $1.30.     Cash  sales,  $160.50. 

22d. — We  discover  an  error  of  $1  in  the  addition  of  Sprague,  Warner 
&  Go's,  bill  of  Jan.  16 — $  1 14.60  should  have  been,  $  1 1 3.60 — make  an  entry  for 
this  $1.  We  pay  for  3  gas  fixtures,  $15.  Draw  your  salary,  $12;  pay  Frank 
Cook,  clerk,  $8. 

23d. — We  pay  for  the  painting  of  our  new  counters  and  shelves,  $8  (note 
the  italicised  word).     W.  D.  Boyer  draws  $20.     Cash  sales,  $138.65. 

24th. — We  buy  goods  on  account  from  J.  S.  Brown  &  Bro.,  time,  60  days 
or  2/10  (2  per  cent,  discount  off  for  cash  in  10  daj-s),  1/16,  $280;  Thatchers 
&  Baxter,  Pueblo,  Colo.,  time,  30  days,  or  i/io,  (i  per  cent,  off  in  10  days) 
1/19,  $220  —  total,  $500.  (When  "or"  precedes  a  fractional  form,  the  upper 
figure  indicates  the  percentage  of  discount  and  the  lower  figure  the  number 
t)f  days  within  which  the  bill  must  be  paid  in  order  to  secure  the  discount.) 
We  pay  freight  on  these  goods,  A.,  T.  &  S.  F.,  $9.30;  dray,  $1.15 — total, 
$10.45. 

1315.  Denver,  Colo.,  J.in.  24,  1883. 

FIRST  NATION.\L  B.\NK 
Pay  to  Boyer  &  Lundie  or  order  $20.50. 

Pai4l  Philip. 

25th. — We  pay  for  a  letter  copying  press  $12.  The  A.,  T.  &  S.  F.  R'y  Co. 
overcharged  us  in  the  freight  bill  paid  yesterday  $1.15,  which  amount  is  this 
day  refunded  to  us.     Cash  sales,  $183.40. 

26th. — We  pay  J.  S.  Brown  &  Bro.  $274.40,  being  in  full  pa)-ment  of  their 
bill  of  Jan.  16,  $280,  less  2  per  cent,  off  for  cash  in  10  days,  $5.60.  (Enter 
this  in  the  same  manner  as  you  would  if  you  had  paid  them  $280,  and  then 
they  had  returned  to  you  $5.60  as  discount  on  the  goods  —  making  the  entry 
in  a  manner  directly  the  reverse  of  that  illustrated  in  paragraphs  497  and 
534.)      We  pay  C.  M.  Lundie's  private  livery  bill,  $6.50.     Cash  sales,  $118.60. 

27th.  —  We  pay  Thatchers  &  Baxter  $217.80,  being  in  full  pa\-ment  of  their 
bill  of  Jan.  19,  $220  less  i  per  cent,  off  for  cash  in  10  days,  $2.20.  (Enter  in 
same  manner  as  for  Brown  &  Bro's.  bill  paid  yestcrda\-.) 

l".Jl(>.  Dknver,  Colo.,  Jan.  27,  1SS3. 

CITY  NATIONAL  BANK 
Fay  to  the  order  of  Boyer  &  Lundie  S403.67. 

Arthur  Borden. 

This  is  to  pay  the  paper  in  paragraph  1202,  .j)400,  and  the  interest  thereon 
to  date,  $3.67. 

29th. — We  sell  to  Wm.  Dougherty,  Golden,  Colo.,  on  account,  time,  60 
days  or  2/5  (2  per  cent,  off  in  5  day.s),  30  bbls.  Salt  @  $2.50,  $75.  Cash  sales, 
$12";.     You  draw  your  salary,  $12;   pay  Frank  Cook,  clerk,  $8. 

260 


DOUBLE   ENTRY   BOOK-KEEPING. 

30th.  — We  sell  to  Paul  Phili])  on  account,  10  bbls.  XX  Flour  @  $7.75. 
$77.50;  5  boxes  Standard  Soap  (<i,  $4,  $20  — total  $97.50.  We  buy  goods  on 
account  from  Catlin  Tobacco  Co.,  1/20,  $135.60;  1/23,  $46.10;  B.  Corn- 
forth,  1/29,  $306  — total,  $487.70.  We  pay  freight,  D.  &  N.  O.,  $5.80;  dray, 
50c.— total,  $6.30. 

1217.  31st.  Golden,  Colo.,  Jan.  30,  18S3. 

HANK  OF  GOLDEN 
Pay  to  Boyer  &  Lundie  or  order  $73  50. 

ll'm.  Dougherty. 

This  paper  is  to  pay  for  our  bill  of  Jan.  29,  $75,  less  2  per  cent,  off  for 
cash  in  5  days,  $1.50.     (See  497,  534  and  92  l)     Cash  sales,  $145.50. 

THE    END    OF   THE    YEAR. 

1218.  For  the  closing  of  the  books  the  following  general  directions  as  to 
the  order  in  which  the  several  particulars  of  the  process  are  to  follow  each   , 
other  may  not  be  amiss  : 

(l.)  See  whether  the  balance  of  cash  on  hand  is  correct.  If  it  is  not 
correct  either  some  cash  item  has  been  omitted,  or  some  Journal  item  has 
been  entered  in  the  Cash  Book.  To  find  this  item,  go  over  the  entries  for  the 
month  and  see  whether  only  such  and  all  such  amounts  as  are  connected  with 
one  of  the  words,  "  pay,"  "  paid,"  "  cash  "  or  "  draws  "  are  entered  in  the  Cash 
Book,  and  also  whether  such  amounts  are  entered  on  the  proper  side  of  this 
book.     (See  857.) 

(2.)  When  the  balance  of  cash  on  hand  is  found  to  be  correct,  balance  the 
Cash  Book.     (See  547  to  554.) 

(3.)  Take  a  "  figure  trial-balance,"  for  the  purpose  of  ascertaining  whether 
the  books  balance.  (See  299  to  302;  also,  694,  701  and  80S.)  If  the  books 
do  not  balance,  to  find  the  error  follow  the  directions  in  298.  To  those  direc- 
tions it  is  thought  advisable  to  here  add  the  following:  See  whether  any 
amounts  are  placed  in  a  "Miscellaneous"  column  which  should  be  placed  in 
an  "extra"  column,  and  vice  versa;  also,  see  whether  the  footings  of  all  the 
"extra"  columns  arc  posted.  (See  469,  470,  547  and  550.)  If  the  error  is  not 
found  after  the  foregoing  examination  has  been  made,  try  the  method  de- 
scribed in  950. 

(4.)  After  the  books  arc  found  to  balance,  close  them  according  to  the 
directions  given  in  270  to  295. 

(5. J  After  the  books  have  been  closed,  make  a  trial-balance  consisting  of 
the  names  and  amounts  of  all  the  accounts  as  they  appear  at  the  beginning 
of  the  new  year.     (See  301,  303,  810  and  81 1.) 

(6.)     Make  a  yearly  statement.     (See  812  to  81S.) 

THE   FIGURES   FOR   THE   CLOSING   OF  THE   BOOKS. 

1219.  Cash  Book.  — Footing  of  "Mdse."  column,  $1,951.55  (see  47(3  and 
547);  footing  of  "Expense"  column,  $167.25   (see  483   and    550);    total  c?.sh 

261 


1220-1221 

DOUBLE   ENTRY   BOOK-KEEPING. 

received,  $2,451.87  (see  548);  total  cash  paid,  $1,439.75  (see  551);  balance  ot 
cash  on  hand,  $4,862.12  (see  552  and  554). 

Journal.-— Tot;il  of  "Mdse.  Dr."  column,  $3,827.40  (see  469);  total  of 
"Mdse.  Cr."  column,  $290.05  (see  470). 

Ledger.  — Footing  of  figure  trial-balance,  $10,180.02.     (See  808  and  809.) 

Inventory.  —  Groceries  on  hand,  $3,800;  fixtures  on  hand,  $450;  Une.v- 
pired  Insurance,  $22.50.     (See  289,  806,  807,  71,  95,  96,  and  1S8.) 

Sundry  Losses  and  Gains.  — Close  all  the  other  accounts  upon  which 
losses  or  gains  have  been  made.  (See  287,  288,  290,  270,  271,  291,  275,  276, 
15  to  19,  292,  293  and  277.) 

Loss  and  Gain  Account.  —  The  net  gain  for  the  firm  is  $325.77;  of 
which,  give  Boyer  $162.88,  and  Lundie,  $162,89.     (See  278  and  280  a.) 

Private  Accounts.  — (See  281,  61,  64  a,  575  and  582.)  W.  D.  Boyer's 
net  private  gain  is  $119.88;  C.  M.  Lundie's,  $121.39.  (See  64  b,  574,  and 
64^.) 

Stock  Accounts. —  (See  64  d,  52,  55  a,  and  565.)  W.  D.  Boyer's  present 
worth  (Feb.  i)  is  $3,619.88;  C.  M.  Lundie's,  $3,621.39.  (See  55  c,  55  d,  55  e, 
563,  and  566.) 

Trial  Balance.  —  Footing  of  trial-balance  taken  after  books  are  closed, 
$10,417.62.     (See  810  and  811.) 

Beginners  when  taking  a  trial-balance  should  be  very  careful  not  to 
place  in  it  any  amount  which  appears  above  the  closing-lines  of  an  account. 

Yearly  Statement.  — Make  a  yearly  statement  like  that  illustrated  in 
812,  813,  814,  817  and  818. 

1220.  Student's  Work  Audited.  — If  the  student  will  send  his  Yearly 
Statement  to  the  author,  together  with  postage  stamps  sufficient  for  its 
return,  it  will  be  examined  and  returned  to  him  with  the  author's  "audit." 

FEBRUARY,   1883. 

1221.  Our  book-keeper's  services  were  so  satisfactory  during  the  past 
year  that  his  salary  is  now  increased  to  $60  a  month.  Frank  Cook's  salary  is 
for  the  same  reason  increased  to  $35  a  month.  We  now  change  our  business 
to  that  of  a  wholesale  and  retail  grocery,  and  employ  two  traveling  salesmen  to 
go  out  "on  the  road"  and  sell  goods  for  us.  Their  names  and  salaries  are  as 
follows:  Ed.  Sloan,  $60  a  month;  E.  D.  Wright,  $50  a  month.  We  pay  all 
their  expenses.  (See  2 16.)  We  keep  personal  accounts  with  all  the  emploj'cs 
this  year,  charging  them  during  each  month  for  all  money  drawn  on  account 
and  crediting  them  at  the  end  of  each  month  for  their  respective  salaries. 
(See  204.)  The  traveling  men  also  have  "  agent "  accounts,  which  are 
charged  with  all  moneys  drawn  by  them  for  traveling  expenses. 

We  shall  discontinue  itemizing  our  sales  on  the  Journal  and  shall  keep  two 
Sales  Books  instead  (see  1122),  which  books  will  be  numbered  i  and  2 
respectively.  Our  sales  as  recorded  in  these  books  will  be  journalized. 
Instead  of  naming  the  articles  which  we  sell,  as  was  done  last  year  (January), 

262 


1222-1223 

DOUBl.K   ENTRY   BOOK-KEEPING. 

in  order  to  save  space  here,  only  the  total  amount  of  each  sale,  together  with 
the  time  (if  any)  and  the  Sales  Book  number  and  page,  will  be  given.  From 
this  the  student  may  imagine  that  the  Sales  Book  entries  have  been  made  and 
make  the  journal-entry  as  in  408  to  416. 

1222.  The  additional  accounts  to  be  opened  this  year  are  as  follows: 
Colorado  National  Bank  Shares,  4  — top;  Little  Giant  Mining  Shares,  4 — 8; 
T.  &B.  Flour,  4— 16;  Rent,  6— 39;  Warehouse  Rent,  7— top;  Drayage,  7 — II; 
Collection  &  Exchange,  7—27;  Taxes,  7—41;  Ed.  Sloan,  Agent,  8— top; 
E.  D.Wright,  Agent,  8—12  ;  TravelingExpenses,  8—25  ;  J.  H.  Goodwin,  $60  a 
month  (the  student  should  substitute  his  own  name  instead),  10— top; 
Ed.  Sloan,  Personal,  $60  a  month,  10—9;  E.  D.  Wright,  Personal,  $50  a  month, 
10—16;  Frank  Cook,  $35  a  month,  10—24;  Berlin  &  Co.,  Boulder,  Colo., 
14—28;  C.  R.  Welch,  Fort  Collins,  Colo.,  14—41;  Clark  &  Tweed,  Lcadville, 
Colo.,  15 — top;  Nichols  &  Long;  Colorado  Springs,  Colo.,  15 — 11;  L  R. 
Morrison,  Georgetown,  Colo.,  15—22;  E.  W.  Lawrence,  Idaho  Springs,  Colo., 
15 — 30;  George  A.  Turner,  City,  16— top;  J.  P.  Williams,  City,  16-8;  Union 
Pacific  Railway  Co.,  City,  16—15;  The  Denver  Republican,  16—22;  Procter 
&  Gamble,  Cincinnati,  18  —  ::9. 

1st.— We  pay  for  February  rent  of  store,  $75;  for  rent  of  a  warehouse  in 
which  to  store  some  of  our  goods,  $25.  We  wish  to  know  our  expenses  for 
each,  and  therefore  keep  an  account  for  each — Rent  and  Warehouse  Rent.  We 
pay  our  gas  bill,  $8;  also,  C.  M.  Lundie's  private  gas  bill,  $3.  Cash  sales, 
$135-50. 

2d.— We  discount  J.  S.  Brown  &  Bro.'s  bill  of  Jan.  2,  $428.75,  less  i  per 
cent,  for  cash,  $4.29,  net  $424.46,  as  follows: 

1223.  Denver,  Colo.,  Feb.  2,  1883. 
COLORADO  NATIONAL  BANK 

Pay  to  the  order  of  J.  S.  Brown  &  Bro.  S424-46. 

Boysr  ^  Lttndie. 

C.  M.  Lundie  draws  $20.  We  buy  5  shares  of  the  Colorado  National 
Bank  stock  @  $110  and  give  our  check  therefor. 

3d. — We  pay  express  charges  on  a  package  from  Chicago  for  Mr.  Boyer, 
$2.50.  J.  H.  Goodwin  (the  book-keeper)  draws  $5  on  account.  (An  account 
is  kept  with  each  employe  this  month — see  204.) 

We  receive  a  bill  from  "The  Denver  Republican"  dated  Feb.  i,  1883.  for 
one  month's  advertising,  $15,  which  we  do  not  pa>-,  but  which  wc  enter. 
Cash  sales,  $162.30. 

5th. —  We  pay  for  a  thousand-mile  ticket  over  the  D.  &  R.  G.  R'\-  for  Ed. 
Sloan  (one  of  our  traveling  agents),  $25.  (\Vc  shall  keep  an  "Agent  account" 
for  each  traveling  agent  according  to  the  method  described  in  216;  therefore, 
all  money  expended  for  and  by  Ed.  Sloan  for  traveling  expenses  will  be 
charged  to  "  Ed.  Sloan,  Agent."  The  same  rule  applies,  of  course,  to  our 
other  agent,  E.  D.  Wright.) 

263 


1324-1226 

DOUBLE   ENTRY   BOOK-KEEPING. 

We  sell  goods  on  account  to  Wm.  Dougherty,  net  (the  meaning  of  "net" 
Is,  "no  discount  ofF  for  cash"),  book  i,  page  i,  $185;  Berlin  &  Co.,  Boulder, 
Colo.,  90  ds.  net,  book  i,  page  3,  $220.50;  Clark  &  Tweed,  Leadville,  Colo., 
30  ds.  or  i/io,  book  2,  page  2,  $324.50;  Nichols  &  Long,  Colorado  Springs, 
Colo.,  60  ds.  or  2/10,  book  2,  page  4,  $286.30  —  total,  $1016.30.  (See  408  to 
416.)    Cash  sales,  $128. 

6th.^Ed.  Sloan  draws  on  his  account  for  private  use  (not  for  traveling 
expenses),  $10;  W.  D.  Boyer,  $J5;  Frank  Cook,  $5. 

1224.  Denver,  Colo.,  Feb.  6,  1883. 
Pay  to  the  order  of  Boyer  &  Lundie  $91. 

tVm.  B.  Berger, 
Cashier  Colorado  National  Bank. 

To  Northwestern  National  Bank,  ) 

Chicago,  Ills.  \ 

Endorsement  oh  above: 

"  Pay  order  of  J.  K.  .'\rmsby  &  Co., 

Boyer  &>  Lundie." 

We  send  the  above  paper  to  J.  K.  Armsby  &  Co.  and  give  our  bank  (The 
Colorado  National)  in  payment  therefor  the  following : 

1225.  Denver,  Colo.,  Feb.  6,  1883. 
COLORADO  NATIONAL  BANK 

Pay  to  (he  order  of  Draft  $91.25. 

Boyer  &'  Lundie. 

The  25c.  is  the  bank's  charge  for  exchange.  (We  keep  a  Collection  and 
Exchange  account.) 

We  deposit  in  our  bank  and  receive  credit  therefor  in  our  bank  book,  the 
following: 

1226.  Denver,  Colo.,  Feb.  6,  1883. 
Thirty  days  after  date  we  promise  to  jiay  to  the  order  of 

The  Colorado  National  Bank  Si, 000,  with  interest@  10  per 
cent.  Boyer  &•  Lundie. 

7th. — We  bu}-  goods  on  account  from  J.  K.  Armsby  &  Co.,  1/26,  $178.30; 
1/31,  $285.60;  B.  T.  Babbitt,  1/24,  $220.50;  Catlin  Tobacco  Co.,  1/26, 
$360.40;  Procter  &  Gamble,  Cincinnati,  60  days,  1/24,  $380;  Sprague,  War- 
ner &  Co,  2/2,  $460;  2/5,  $129.60 — total,  $2,014.40.  We  pay  freight: 
B.  &  M.R.,  $16.30;  U.  P.,  $12.40  — total,  $28.70;  drayage  (O'Brien).  $1.50. 
(We  keep  a  Drayage  account.) 

8th.  —  We  pay  express  charges  on  goods  from  St.  Louis,  $3.  The  U.  P. 
R.  R.  Co.  charged  us  6c.  a  case  too  much  on  20  cases  of  Canned  Peaches  in 
the  bill  paid  yesterday.  We  now  make  an  entry  for  this  $1.20.  The  paper 
in  paragraph  12 13  is  paid,  $123.40. 

264 


1227-1232 

DOUr.LE   ENTRY    BOOK-KEEPING. 

1227.  Denver,  Colo.,  Feb.  8,  1883. 
Thirty  days  .ifter  dfite  we  promise  to  pay  to  the  order  of 

H.  C.  Frost  $800,  with  interest  .-it  10  per  cent. 

Boyer  or'  Lundie. 

This  paper  is  for  20  shares  of  the  "  Little  Giant "  mining  stock  @  $40. 

9th.  —  Our  bank  enters  in  our  bank  book  as  a  deposit  $184.65,  being  the 
proceeds  of  the  following  paper  which  was  drawn  on  Feb.  6  and  is  now  paid — 
35c.  having  been  deducted  as  collection  charges: 

1228.  Denver,  Colo.,  Feb.  6,  1883. 
At  sight  p.iy  to  the  orderof  Colorado  National  Bank  $185, 

and  charge  the  same  to  account  of 

Boyer  &•  Lundie. 
To  \Vm.  Dougherty,  ) 

Golden,  Colo.  \ 

Berhn  &  Co.  claim  an  o\ercharge  of  50c.  on  Coffee  charged  in  our  bill  of 
Feb.  5,  which  claim  we  allow  aid  make  an  entry  therefor. 

1229.  Boulder,  Colo.,  Feb.  5,  1883. 
Ninety  days  after  dale  we  promise  to  pay  to  the  order  of 

Koyer  &  Lundie  $220.  Berlin  S^  Co. 

Cash  sales,  $180. 

loth.  —  We  pay  E.  D.  Wright's  traveling  expenses  to  date,  $22.60. 

1230.  Denver,  Colo.,  Feb.  10,  18S3. 
Fifteen  days  after  date  I  promise  to  pay  to  the  order  of 

Boyer  &  Lundie  S608,  with  interest  at  10  per  cent. 

.Irthur  Borden. 

This  is  for  the  paper  in  paragraph  1204,  $600,  and  interest  thereon  to 
date,  $8. 

1231.  Denver,  Colo.,  Feb.  10,  1SS3. 
Thirty  days  after  date  we  promise  to  pay  to  the  order  of 

Sprague,  Warner  &  Co.  $399,  with  interest  at  10  per  cent. 
Boyer  &"  LutuiU. 

We  sell  for  cash  |  ton  coal,  $1.50.     Cash  sales,  $130. 

1232.  I2th. — We  have  this  day  bought  from  Thatchers  &  Baxter,  of 
Pueblo,  100  bbls.  of  "Super  X"  flour,  and,  wishing  to  know  how  much  we  make 
or  lose  on  it,  we  open  an  account  for  "  T.  &  B.  Flour,"  which  account 
we  shall  charge  with  the  cost  of  the  flour  and  all  expenses  thereon,  and  credit 
with  all  proceeds  from  sales.  We  pay  Mr.  Boyer's  expenses  to  and  from 
Pueblo,  whither  he  went  solely  for  the  purpose  of  purchasing  this  flour,  $4. 
C.  M.  Lundie  takes  groceries  from  the  store  for  his  private  use,  book  i,  page 
4,  $12.60.  We  sell  goods  on  account  to  Berlin  &  Co.,  book  i,  page  5,  $188.50; 
Clark  &  Tweed,  book  i,  page  9,  $270;  Nichols  &  Long,  book  2,  page  8, 
$345.50;  Wm.  Dougherty,  book  2,  page   11,  $225  — total,  $1,041.60. 

265 


1233—1235 

DOUBLE   ENTRY   BOOK-KEEPING. 

13th.— We  receive  from  Thatchers  &  Baxter  100  bbls.  "Super  X"  Flour 
@  $5,  $500;  time,  30  ds.  (days)  or  1/  10  from  Feb.  12.  We  pay  on  thi.s  flour, 
freight,  D.  &  N.  O.,  $22.50;  dray,  $2.50.     Cash  sales,  $65. 

14th.  —  Our  bank  enters  in  our  bank  book  as  a  deposit,  $608,  this  being  for 
the  paper  in  paragraph  1230,  which  is  now  deposited  and  consequently  bears 
this  endorsement: 

"  Boyer  &'  Lundit." 

Since  this  paper  bears  a  rate  of  interest  which  is  satisfactory  to  the  bank,  no 
discount  is  deducted. 

1233.  New  York,  N.  Y.,  Jan.  24,  18S3. 

Sixty  days  after  date  pay  to  the  order  of  myself  $220.50, 
and  charge  the  same  to  account  of 

B.   T.  Babbitt. 

To  Boyer  &  Lundie,  ( 

Denver,  Colo,  j 

Written  across  the  face  of  above  in  red  ink  is  : 

"  Accepted  2/14/83.     Boytr  &=  Lundif.'' 

W.  D.  Boyer  draws  $15;  J.  H.  Goodwin,  $10. 

15th.  — We  have  the  "Super  X"  Flour  insured  for  $500,  paying  \  per  cent, 
premium  in  the  "  yEtna,"  $2.50.  We  give  to  E.  D.  Wright  for  personal  use, 
$20;  for  traveling  expenses,  $25.  We  sell  to  Berlin  &  Co.  on  account,  time 
30  ds.  net,  50  bbls.  "  Super  X  "  Flour  @  $6,  $300. 

1234.  l6th.  Colorado  Springs,  Colo.,  Feb.'  5,  1883. 

Sixty  days  after  date  we  promise  to  pay  to  the  order  of 
Boyer  &  Lundie  $286.30.  Nichols  &"  Long 

1235.  Leadville,  Colo.,  Feb.  15,  18S3. 
At  sight  of  this  first  of  exchange  (second  unpaid)  pay  to 

the  order  of  Clark  &  Tweed  $321.25. 

Jolm  C.  Mitchell, 
Cashier  Carbonate  Bank. 

To  Kountze  Bros.,  Bankers,  (  

New  York  City.  J 

Endorsement  on  above : 

"  Pay  order  of  Boyer  &  Lundie. 

Clark  iS-  Tweed." 

This  is  for  our  bill  of  Feb.  5,  $324.50.  less  i  per  cent,  for  cash  in  10  days, 
$3.25.     Cash  sales,  $260.20. 

17th.— Berlin  &  Co.  write  us  that  there  is  an  error  of  $1  in  the  addition  of 
our  bill  of  Feb.  12— $188.50  should  be  $187.50.  Upon  examination  of  the 
entry  on  the  Sales  Book  we  find  this  to  be  the  case  and  therefore  make  an 
entry  for  this  $1. 

266 


1236—1239 

DOUIU.E   ENTRY   BOOK-KEEPING. 

We  pay  F.  Keppler's  bill  for  drayage  to  date,  $26. 

19th.— We  send  to  Catlin  Tobacco  Co.  a  bank  draft  for  $181.70,  for  which 
we  give  to  our  bank  a  check  for  $182.20— the  50c.  extra  being  for  exchange. 
This  is  the  same  kind  of  a  transaction  as  that  in  paragraphs  1224  and  1225.  We 
pay  taxes:  City,  $12;  County,  $10;  total,  $22.  We  keep  a  Taxes  account. 
We  sell  for  cash  lO  bbls.  "  Super  X  "  Flour  @  $6.25,  $62.50.    Cash  sales,  $  168.50. 

1236.  When  counting  the  sales  money  at  night  we  discover  therein  a 
counterfeit  five  dollar  bill,  which  we  deposit  —  in  the  stove.  When  making  the 
entry  for  this  bill,  bear  in  mind  that  the  blame  rests  upon  the  man  who  took 
it  in  and  not  upon  Merchandise.  Since  both  the  employers  as  well  as  both  the 
employes  made  cash  sales  during  the  day,  and  since  each  of  the  four  is  very 
positive  that  he  did  not  take  in  the  bill,  the  firm  will  have  to  bear  the  loss. 
(See  lines  3  to  6  in  paragi;aph  287.) 

20th.— We  send  to  Thatchers  &  Baxter  a  check  for  $495  to  pay  for  their 
Flour  bill  of  Feb.  12;  the  bill  being  $500  from  which  we  deduct  i  per  cent,  for 
cash  in  10  days,  $5.  We  pay  the  city  scale  inspector  $2  for  examining  our 
scales.     We  give  Ed.  Sloan  for  traveling  expenses,  $27.50. 

1237.  2ist. — We  exchange  the  routes  of  our  traveling  agents,  placing 
Ed.  Sloan  on  E.  D.  Wright's  route,  and  vice  versa.  Sloan  has  used  up  600 
miles  of  his  1,000-mile  ticket  over  the  D.  &  R.  G.  R'y,  and  we  now  transfer 
the  remainder  of  the  ticket,  representing  400  miles,  which  at  2\c.  a  mile  is 
worth  $10,  from  Sloan  to  Wright.  We  receive  a  check  from  Wm.  Dougherty 
for  $222.75,  being  in  payment  of  our  bill  of  Feb.  12,  $225,  less  i  per  cent,  for 
cash  in  10  days,  $2.25. 

1238.  Leadville,  Colo.,  Feb.  12,  1883. 
Thirty  days  after  date  we  promise  to  pay  to  the  order  of 

Boyer  &  Lundie  S270.  Clark  &=  Tweed. 

22d. — We  pay  for  postage  stamps,  $10.  Frank  Cook  draws  $20.  Cash 
sales,  $126.50. 

1239.  Now  since  page  5  of  the  Cash  Book  is  filled,  rule  a  single  red  line 
across  all  the  money-columns  on  both  the  debit  and  the  credit  sides  on  the 
same  line  with  the  last  entry  on  the  credit  side,  that  is,  on  the  line  with  the  $20 
charged  to  Frank  Cook.  Now  add  all  the  columns  in  this  book  and  place  the 
totals  thereof  on  the  line  below  the  single  red  line,  writing  in  the  space 
preceding  these  amounts,  that  is,  in  the  "Explanation"  space  (see  474  and 
481),  the  following  words:  "Am'ts  Carried  Forward."  Simply  the  word 
"  Forward  "  is,  however,  sufficient.  The  footings  of  the  several  columns  should 
be  as  follows:  Miscel.  Cr.,  $2,411.50;  Mdse.  Cr.,  $1,360.29;  Total,  $4,862.12; 
Miscel.  Dr.,  $2,329.75  ;  Expense  Dr.,  $25.  Next,  rule  directly  below  these 
footings  a  double  red  line  across  all  the  money  columns,  and  then  carry  for- 
ward these  footings  to  the  top  of  their  proper  columns  on  pages  6  and  7, 
writing  the  following  words  in  the  "Explanation"  columns:  "Am'ts  Brought 
Forward."     After  having  thus  brought  forward  the  footings  from  pages  4  and 

267 


1240— 1,'44 

DOUBLE   ENTRY   BOOK-KEEPING. 

5  make  the  new  cash  entries  on  pages  6  and  7.  In  this  manner,  whenever  a 
page  is  filled,  the  footings  of  the  columns  in  the  Cash  Book  are  carried  for- 
ward from  page  to  page  until  the  end  of  the  month. 

23d. ^ — We  pay  for  C.  M.  Lundie  insurance  on  his  household  goods,  $8. 
We  pay  Mr.  Boyd's  expenses  to  and  from  Chicago  in  the  interest  of  our 
business,  $80.     We  lend  J.  F.  Chatard  $100  cash  on  the  following  paper: 

1240.  Denver,  Colo.,  Feb.  23,  18S3. 

Thirty   days   after   date    I    promise  pay  to  tlie  order  ot 
Boyer  &  Lundie  $100.  J.  F-  Chatard. 

We  sell  goods  on  account  to  C.  R.  Welch,  Fort  Collins,  Colo.,  30  days,  net, 
book  I,  page  12,  $28.60;  I.  R.  Morrison,  Georgetown,  Colo.,  10  days,  net,  book 

1,  page   14^ $76.20;  E.  W.  Lawrence,  Idaho  Springs,  Colo.,  30  days,  net,  book 

2,  page  13,'  $120.62;  Berlin  &  Co.,  60  days  or  2/ 10,  book  2,  page  17,  $340.20; 
Geo.^A.  Turner,  City,  30  days,  net,  book  2,  page  20,  $278;  Nichols  &  Long, 
30  days  or  i/io,  book  2,  page  23,  $260  — total,  $1,103.62.  We  sell  for  cash, 
postage  stamps,  $1.75. 

1241.  Denver,  Colo.,  Feb.  23,  1883. 
COLORADO  NATIONAL  BANK 

Pay  to  the  order  of  B.  Cornforth  5318.90. 

Boyer  <&•  Lundie. 

1242.  Denver,  Colo.,  Feb.  23,  1883. 
Thirty  days  after  date  we  promise  to  pay  to  the  order  of 

B.  Cornforth  $200,  with  interest  at  10  per  cent. 

Boyer  ^  Lundie. 

24th.  — We  sell  for  cash  5  shares  of  the  Little  Giant  mining  stock  %  $45, 
$225.  We  are  on  this  day  notified  by  the  U.  P.  R'y  Co.  that  they  will  not 
allow  our  claim  of  overcharge  made  on  Feb.  8,  $1.20.     Cash  sales,  $137.50. 

26th.— The  paper  in  paragraph  1205   is  now  due.     Mr.  Turner  pays  $200 
cash  on  it,  leaving  a  balance  of  $300,  plus  the  interest  to  date,  $8.75.     He  now 
owes   us   in   addition   to  these   $308.75,  $278  on  account,  making  a  total  of 
$586.75,  for  which  latter  amount  he  gives  us  the  following  paper: 
1243.  Denver,  Colo.,  Feb.  26,  1883. 

Thirty  days  after  date  I  promise  to  pay  to  the  order  of 
Boyer  and  Lundie  S586.75,  with  interest  at  10  per  cent. 

Geo.  A.   Turner. 

Upon  receipt  of  the  above  paper  and  the  $200  cash,  we  surrender  to  Mr. 
Turner  the  paper  in  paragraph  1205,  and  give  to  him  a  receipt  for  the  amount 
of  his  account. 

We  give  to  the  First  National  Bank  a  check  for  $361.15  — 75c.  of  which  is 
for  collection  charges  and  exchange  and  the  remaining  $360.40  is  for  the 
following  paper : 

1244.  St.  Louis,  Mo.,  Feb.  23,  1S83. 

At  sight  with  exchange  pay  to  the  order  of  Cashier  First 
National  Bank  $360.40,  and  charge  the  same  to  account  of 
Catlin  Tobacco  Co. 
To  Boyer  &  Lundie,  ) 

Denver,  Colo.  J 


1245-1247 

DOUBLE    ENTRV    HOOK-KEEI'ING. 

Cash  sales,  $142.60. 

27th. — We  pay  for  rent  of  post-office  box  for  3  months,  $2.  We  sell  to 
J.  P.  Williams,  City,  on  account,  10  bbls.  "  Super  X  "  Flour  («)  $6.50,  $65.  We 
buy  goods  on  account  from  B.  T.  Babbitt,  30  ds.,  2/10,  $212.65;  B.  Corn- 
forth,  2/ 17,  $312.30 ;  2/26,  $43.05;  Procter  &  Gamble,  60  ds.,  2/12,  $146.80; 
Sprague,  Warner  &  Co.,  2/19,  $83.20;  2/21,  $10.60— total,  $808.60.  We 
pay  freight,  U.  P.,  $17.50. 

1245.  Chicago,  Ills.,  Feb.  25,  1883. 
Thirty   days   .Tfter   date   pay  to   the   order  of  ourselves 

$178.30,  and  charge  the  same  to  account  of 

J.  A".  Arniihv  i^  Co. 

To  Dover  &  Lundic,  1 

Denver,  Colo.  \ 

Written  across  the  face  of  above  in  red  ink  is: 

"  Accepted,  2/27/83.     Boyer  (J-  I.undie." 

28th.— We  pay  Pat.  O'Brien's  bill  for  drayage  to  date,  $11.  W.  D.  Beyer 
.Iraws  $25;  C.  M.  Lundie,  $30. 

1246.  De.nver,  Co1,>.,  Kel..  23,  1883. 
Thirty  days  after  date  pay  to  the  order  of  ourselves  $260, 

and  charge  the  same  to  account  of 

Boyer  if  Lundie. 

To  Nichols  &  Long,  ) 

Colorado  Sprini^s,  Colo.  \ 

Written  across  the  face  of  above  in  red  ink  is: 

"  Accepted,  2/27/83.     Niihols  &■■  Long." 

Cash  sales,  $115.30.  The  salaries  for  the  past  month  are  as  follows:  Frank 
Cook,  $35;  E.  D.  Wright,  $50;  Ed.  Sloan,  $60;  J.  H.  Goodwin,  $60.    (See  204.) 

THE    END    OF   THE    VEAK. 

1247.     The  figures  for  the  closing  of  the  books  this  "year"  are  as  follows : 

Cash  Book. — Footing  of  "Mdse."  column,  $1,755.69;  footing  of  "E.xpense" 
column,  $107;  total  cash  received,  $4,593.94;  total  cash  paid,  $3,308.30; 
balance  of  cash  on  hand,  $6,147.76;  grand  total  of  Cash  Book  footings  (in 
"Total"  columns),  $9,456.06. 

Journal.  —  Total  of  "Mdse.  Dr."  column,  $2,824.50;  total  of  "  Mdse.  Cr." 
column,  $3,161.52. 

Ledger.  —  Footing  of  figure  trial-balance,  $13,703.22. 

Inventory.  —  Groceries  on  hand,  $2,500;  Little  Giant  Mining  Shares, 
$600;  T.  &  B.  "Super  X"  Flour,  $150;  Insurance  Unexpired,  $20.  The  Store 
&  Office  Fixtures  and  the  Colorado  Natio.nal  Bank  Shares  are  valued  at  just 
what  their  respective  accounts  now  represent ;  therefore,  these  accounts  are 
this  year  allowed  to  stand  as  resources.  The  other  accounts  included  in  the 
Inventory  are  closed  according  to  the  directions  in  71,  95  and  188. 

269 


1248—1^52 

DOUBLE    ENTRY    BOOK-KEEPING. 

Loss  AND  Gain  Account.  — The  net  gain  for  the  firm  is  $242.06.  to  be 
divided  equally  between  the  partners. 

Priv.\TE  Accounts.  —  W.  D.  Boyer's  net  private  gain,  $53-53;  C.  M. 
Lundie's,  $47.43. 

Stock  Accounts.— W.  D.  Boyer's  present  worth  r:\Ich.  11  is,  $3,673.41; 
C.  M.  Lundie's,  $3,668.82. 

Trial  Balance.  —  Totals  of  trial-balance  taken  after  the  books  are  closed, 

$I3,78743- 

Statistical  Statement.— Make  a  statistical  statement  like  that  illus- 
trated in  925,  prefixing  the  statistics  of  the  preceding  year  to  those  of  the 
present  year. 

MARCH,    1883. 

1248.  The  additional  accounts  to  be  opened  this  year  are  as  follows: 
G.  H.  Atwood,  Stock,  1—34;   G.  H.  Atwood,  Private,  2—40;   Lot  &  Building, 

4 31;  Horses  &  Wagons,  4— 38;  Discount,  9  — top;  Bank  Shares  Dividend, 

g—g;  Attorney  Fees,  9—17;  Lost  Accounts  and  Notes,  9—25;  Fritz  Krause, 
Truckman,  10—33;  Austin,  P.eynolds  &  Co.,  City,  10—40;  S.  E.  Rogers, 
Golden,  Colo.,  15—38;  R.  J.  Gluckler,  Attorney,  Georgetown,  Colo.,  16—29; 
Wm.  H.  Austin,  City,  16—37;  Long  Bros.,  Kansas  City,  Mo.,  18—37. 

1249.  Cash  Book  for  this  Year.  — During  this  year  we  will  have  two 
"extra"  columns  on  each  side  of  the  Cash  Book,  as  follows:  On  the  Debit 
side  write  at  the  top  of  the  columns,  — "  Miscel.  Cr.,"  "  Mdse.  Cr.,"  and 
"Interest  Cr.;"  on  the  Credit  side,— "  Miscel.  Dr.,"  "  E.xpense  Dr.,"  and 
"Interest  Dr.," — reserving  no  "Total"  columns.  Care  must  be  taken  to 
extend  all  items  for  Merchandise,  Interest,  and  Expense  into  their  proper 
columns.  The  Cash  Book  should  be  closed  at  the  end  of  the  month  after  the 
manner  illustrated  and  described  in  1123  and  1124. 

1250.  1st.— We  have  this  day  taken  into  partnership  Mr.  G.  H. 
Atwood.  The  style  of  the  firm  now  is  to  be,  "  Boyer,  Lundie  &  Co."  Each 
partner  is  to  be  paid  a  salary  of  $75  a  month.  (See  65.)  The  gains  and 
losses  are  to  be  shared  pro  rata  according  to  investment  at  the  beginning  ot 
each  year. 

G.  H.  Atwood  this  day  invests  as  follows : 

1251.  Denver,  Colo.,  Mcli.  i,  1883. 
GERMAN  NATIONAL  BANK 

Pay  to  Boyer,  Lundie  &  Co.  or  order  $3,000. 

C.  II.  Atwood. 

1252.  Denver,  Colo.,  Feb.  26,  1S83. 
Thirty  days  after  date  I  promise  to  pay  to  the  order  of 

G.  H.  Atwood,  $2,000,  with  interest  at  10  per  cent. 

M.  E.  BuJdee. 

Endorsement  on  abo^c^e: 

"Pay  order  of  Boyer,  Lundie  &  Co. 

G.  //.  Alwood." 


1253-1257 

DOUBLE   ENTRY    llOOK-KEEI'ING. 

We  pay  for  C.  M.  Lundie's  rent  of  his  jjrivatc  house,  $25;  for  rent  of  ware- 
house, $25;  gas  bill  for  store,  $7-30;  C.  M.  Lundie's  gas  bill,  $2.75.  Cash 
sales,  $118.30. 

We  buy  from  Wm.  H.  Austin  the  lot  and  building  on  the  S.  W.  cor.  of  i6th 
and  Champa  streets:  lot,  $3,000;  building,  $4,000.  We  give  in  settlement 
therefor  the  following  papers: 

1253.  Denver,  Colo.,  Mch.  i,  1S83. 

COLORADO   NATIONAL   HANK 
Pay  to  the  order  of  Wm.  H.  Austin  $4,500. 

Boytr,  Ltmdie  &'  Co. 

1254.,  Denver,  Colo.,  Mch.  i,  1883. 

Four  months  after  date  we  promise  to  pay  to  the  order  of 
Wm.  H.  Austin  $2,500. 

Boytr,  Lundie  &'  Co. 

2d.— J.  H.  Goodwin  draws  $35;  Ed.  Sloan,  $25.  We  buy  for  cash  from 
David  K.  Wall,  3  horses:  "Lucy,"  $100;  "John,"  $  125;  "Dick,"  $1  ID— total. 

$335- 

1255.  Denver,  Colo.,  Mch.  2,  18S3. 
Thirty  days  after  date  we  promise  to  pay  to  the  order  of 

David  K.  Wall  $235. 

Boyer,  Lundie  t5^  Co. 

This  paper  is  for  I  Truck,  $135  ;  i  Delivery  Wagon,  $iOO.  (We  keep  a 
Horses  &  Wagons  account.) 

1256.  Denver,  Colo.,  Mch.  2,  1883. 
COLORADO   NATIONAL   BANK. 

Pay  to  the  order  of  H.  C.  Frost  $500. 

Boytr,  Lundif  &'  Co 

This  is  for  a  payment  on  the  paper  in  paragraph  1227. 

3d. — Our  building  consists  of  three  stories  and  a  basement.  We  let  the 
two  floors  over  our  store  to  C.  S.  Robbins  and  receive  for  the  month  of  March, 
$65.  C.  Vl.  Lundie  draws  $60.  We  pay  for  a  new  Sales  Book,  $8.  We  give 
"The  Denver  Republican"  a  check  for  $15,  the  amount  due. 

1267.  Denver,  Colo.,  Mch.  3,  1SS3. 

On  demand  pay  to  the  order  of  Wm.  S.  Farley  $75,  and 
charge  the  same  to  account  of 

Boytr,  Lundie  &•  Co. 
To  Paul  Philip,  ) 

Denver,  Colo.  ) 

Cash  sales,  $128.60. 

5th. — We  sell  goods  on  account  to  Chas.  Davenport,  book  2,  page  25, 
$82.30;  Paul  Philip,  book  2,  page  26,  $114.60;  Wm.  Dougherty,  book  3,  page 
2,  90  days,  $208.35;  Nichols  &  Long,  book  3,  page  6,  $295.60;  Clark  &  Tweed, 
book  3,  page  12,  $473.25— total,  $1,174.10. 

271 


1258-1262 

DOUBLE    ENTRY    BOOK-KEEPINC;. 

1258.  Denver,  Colo.,  Mch.  5,  1883. 
COLORADO   NATIONAL   BANK 

Pay  to  the  order  of  Best,  Wilder  &  Co.  $325.75. 

Boyer^  Lundie  ^  Co. 

This  paper  is  for  the  following: 

1259.  Denver,  Colo.,  Mch.  3,  1883. 
On  demand  pay  to  the  order  of  Best,  Wilder  &  Co.  S325.75, 

and  charge  the  same  to  account  of 

Spraguf^   Warner  &^  Co, 
ToBoyer,  Lundie&Co.,       I 
Denver,  Colo,  j 

Cash  sales,  $180.30. 

6th.  E.  D.  Wright  draws  for  personal  use,  $40 ;  for  traveling  expenses, 
$32.  We  give  to  the  City  National  Bank  a  check  for  $209.20,  of  which,  6oc 
are  for  exchange  and  collection  charges  and  the  remaining  $208.60  for  the 
following  two  papers  which  were  sent  to  this  bank  for  collection,  namely : 

The  paper  in  paragraph  12 14,  for  $85.60,  and  the  paper  given  below: 

1260.  Chicago,  Ills.,  Mch.  i,  1883. 
At  three  days  sight,  with  exchange,  pay  10  the  order  of 

Cashier  City  National  Bank  $123,  and  charge  the  same  to 
account  of 

J.  K.  Armsby  ^^  Co. 
To  Boyer,  Lundie  &  Co.,  | 

Denver,  Colo.        )       (See  143- ) 

Cash  sales,  $172.35. 

7th.  Frank  Cook  draws  $15;  W.  D.  Boyer,  $35.  We  receive  a  letter 
from  Ed.  Sloan  stating  that  his  money  became  exhausted  while  he  was  in 
Colorado  Springs  and  that  he  obtained  from  Nichols  &  Long  $25  for  travel- 
ing expenses,  for  which  amount  he  gave  them  a  receipt  on  account. 

1261. 


8th.  We  pay  for  having  our  three  horses  shod,  $9.  (We  wish  to  know 
whether  it  is  cheaper  to  own  horses  and  wagons  and  employ  a  driver  on  a 
salary,  or  to  hire  our  carting  done,  as  in  the  two  preceding  years;  we 
therefore  charge  all  expenses  pertaining  to  our  carting  to  Drayage 
account.)  We  pay  freight :  U.  P.,  $26.70;  D.  &  N.  O.,  $13-75  ;  express 
$2.30— total,  $42.75- 

1262.  Denver,  Colo.,  Mch.  8,  1883. 

COLOR.A.DO  NATIONAL  BANK 
Pay  to  the  order  of  Sprague,  W'arncr  K:  Co.  $263.85. 

Poycr,  l.undie  &"  Co. 

We  buy  and  send  to  B.  T.  Babbitt  a  bank  draft  for  $212.65;  we  pay 
exchange  thereon,  50c. 

272 


Denver,  Colo.,  Mch.  7,  18S3. 

With  exchange  pay  tc 

.  the  order  of  Sprague.  Warner  &  Co. 

76.20,  and  charge  the 

same  to  account  of 

Borer,  Lundie  d-  Co. 

To  I.  R.  Morrison, 

\ 

Georgetown, 

Colo,  f 

1.2G3-12«;h 

DOUni,K   ENTRY    liOOK-KEEPINU 

1263.  9th.  The  paper  in  paragraph  1261  is  on  this  day  returned  to  us 
with  the  endorsement  canceled  and  the  following  memorandum  written  on 
the  back  in  pencil ; 

"  raymeiit  refused.      Says  he  is  'hard  up.'  " 

We  do  not  give  S.  VV.  &  Co.  a  check  for  the  paper  but  give  them  a  receipt 
for  its  return. 

1264.  Denver,  Colo.,  Mch.  9,  1883. 
FIRST  NATIONAL  BANK, 

Pay  to  tlie  order  of  lioyer,  Lundie  &  Co.  $22.50. 

Paul  rhilip. 

Cash  sales,  $173.25.     C.  JM.  Lundie  draws  $20. 

1265.  loth.  We  make  out  an  itemized  statement  of  I.  R.  Morrison's 
account,  make  an  affidavit  before  a  notary  as  to  its  correctness,  and  send  it 
to  R.  J.  Glucklcr,  attorney,  Georgetown,  Colo.,  for  collection.  The  amount  of 
the  account  is  $76.20.  Morrison  is  the  customer  upon  whom  we  made  a  sight 
draft  a  few  days  ago,  and  who  allowed  it  to  come  back  to  us  with  the 
remark  that  he  was  "  hard  up." 

1266.  Denver,  Colo.,  Mch.   5,  18S3. 
Ninety    days   after   date  pay  to  the   order  of  ourselves 

$208.35,  and  charge  the  same  to  account  of 

Boyer,  Lundie  6-  Co. 

To  Wm.  Dougherty,  |  

(;olden,  Colo.  \ 

Wriiien  across  tlte  face  of  above  in  red  ink  is : 

"Accepted,  3/7/83-      r.ayable  at  First  National  Bank, 
Denver,  Colo.  It'm.  Dougherty." 

We  receive  a  bank  draft  from  Nichols  &  Long  for  $289.69,  in  payment  of 
our  bill  of  March  5  for  $295.60,  less  2  per  cent,  off  for  cash  in  10  days,  $5.91 : 
we  wish  to  know  how  much  we  make  or  lose  on  discounts  on  bills  for  goods 
this  year,  therefore,  we  keep  a  "Discount"  account,  which  we  will  balance 
and  carry  the  loss  or  gain  thereon  into  the  Merchandise  account  at  the  end 
of  the  year. 

The  paper  in  paragraph  1226  is  due  to-day,  together  with  $9.17  interest. 
It  is  settled  for  as  follows : 

1267.  Denver,  Colo.,  Mch.  10,  1883.     . 
COLORADO  NATIONAL   BANK 

Pay  to  the  order  of  Colorado  National  Bank  $509.17. 

Boyer,  Lundie  &'  Co. 

1268.  Denver,  Colo.,  Mch.  10,  1883. 
Thirty  days  after  date  we  promise  to  pay  to  the  order  of 

Colorado  National  Bank  $500,  with  interest  at  10  per  cent. 
Boyer,  Lundie  o-^  Co. 

2/3 


1269-1271 

DOUBLE    ENTRY    BOOK-KEEPING. 

I2th.  We  pay  for  repairs  on  delivery  wagon,  $3.25  ;  postage  stamps, 
$6.50.     G.  H.  Atwood  draws  $40;    J.  H.  Goodwin,  $15.     Casli  sales,  $146.50. 

13th.  The  paper  in  paragraph  1207  is  paid,  $450,  as  likewise  the  balance 
due  on  that  in  paragraph  1227,  $300;  also  the  interest  on  the  latter  to  date, 
$5.80. 

1269.  Denver,  Colo.,  Mch.  13,  1SS3. 
Sixty  days  after  date  we  promise  to  pay  to  the  order  of 

Boyer,  Lundie  &  Co.  SiSo. 

Ihttnphrey  &^  Slayback. 

The  above  paper  is  for  30  bbls.  "Super  X"  Flour  @  $6,  $180. 

When  we  purchased  the  "Super  X"  Flour  we  placed  it  in  our  warehouse. 
We  now,  since  it  is  all  sold,  charge  up  $10  for  storage  of  it. 

14th.  E.  W.  Lawrence  of  Idaho  Springs  has  failed.  We  now  compromise 
with  him  by  giving  him  a  receipt  in  full  of  his  indebtedness,  $120.62,  upon 
his  payment  to  us  of  fifty  cents  on  the  dollar.  We,  therefore,  receive  from 
him  $60.31.  We  pay  for  repairs  on  the  roof  of  our  building,  $15.  Cash 
sales,  $127.60. 

15th.  —  During  this  year  we  enter  the  bills  only  twice  a  month,  after  the 
manner  described  in  331  and  309.  The  bills  which  have  accumulated  thus 
far  this  month  are  as  follows:  J.  K.  Armsby  &  Co.,  3/3,  $112.35;  3/6, 
$136.50;  J.  S.  Brown  &  Bro.,  30  ds.  or  1/ 10,  3/14,  $465.50;  Catlin  Tobacco 
Co.,  3/1,  $160.40;  3/5,  $138.60;  B.  Cornforth,  3/12,  $327.30;  Procter  & 
Gamble,  3/2,  $280.20;  Sprague,  Warner  &  Co.,  3/5,  $420.60;  3/8,  $87.75  ; 
3/12,  $314.25  — total,  $2,443.45.  We  pay  freight :  U.  P.  $28.75  ;  D.  &  N.  O., 
$18.30  —  total,  $47.05.  We  receive  from  our  bank  a  check  for  $30,  which  is 
for  a  semi-yearly  dividend  of  6  per  cent,  on  our  Colorado  National  Bank 
Shares.    (We  keep  a  Bank  Shares  Dividend  account.) 

1270.  Denver,  Colo.,  Mch.  15,  1883. 
Sixty  days  after  date  we  promise  to  pay  to  the  order  of 

Sprague,  Warner  &  Co.  $496. 46.  with  interest  at  10  per  cent. 
Boyer^  Lundie  ^  Co, 

The  above  paper  is  to  take  up  the  paper  in  paragraph  1231  which  is  due 
to-day,  $399,  to  cover  interest  due  thereon  to  date,  $3.66,  and  to  settle  for 
bills  of  Feb.  19,  $83.20,  and  Feb.  21,  $10.60  — total,  $496.46. 

16th. — We  take  the  paper  in  paragraph  1266  to  our  bank  and  get  it  dis- 
counted: the  face  of  the  paper  is  $208.35;  amount  of  discount,  $4.75;  we 
receive,  $203.60.  (See  152  and  153.)  The  paper  in  paragraph  1212  is  paid, 
$85.50. 

1271.  Cincinnati,  Ohio,  Mch.  2,  1883. 
Sixty  days  afterdate  pay  to  the  order  of  Cash'r  Merchants' 

National  Hank,  Cincinnati,  $280.20,  and  charge  the  same  to 
account  of  Procter  Sf  Gamble. 

To  Boyer,  Lundie  &  Co.,  ) 

Denver,  Colo.  \ 

274 


1272-1274 

DOUlil.K    KNTRV    liOOK-KEEl'lNG. 

Wrtlten  across  the  face  of  the  preceding-  paper  in  red  ink  is: 

"Accepted,  3/16/83.     Boyer,  Lundie  (^  Co." 

17th.— We  deposit  in  our  bank  the  paper  in  paragraph  1243,  $586.75.  We 
receive  credit  in  our  bank  book  for  $589.85,  of  which,  $3.10  represent  the 
interest  which  has  accrued  to  date  on  the  $586.75.  We  sell  goods  on  account 
to  S.  E.  Rogers,  Golden,  Colo.,  30  ds.,  net,  book  I,  page  15,  $26.50;  Nichols 
&  Long,  book  i.page  18,  $265.20;  Wm.  Dougherty,  30  ds.  or  1/5,  book  2,  page 
31,  $305.40;  Berlin  &  Co.,  30  ds.,  net,  book  2,  page  33,  $173.85;  Chas.  Daven- 
port, book  3,  page  14,  $83.50;  Clark  &  Tweed.  60  ds.,  book  3,  page  19,  $43205; 
total,  $1,286.50.  The  paper  in  paragraph  1238  is  jjaid  by  a  bank  draft,  $270. 
Cash  sales,  $165.50. 

19th.— C.  M.  Lundie  draws  $30;  G.  H.  Atwood,  $25. 

1272.  Georgetown,  Colo.,  Mch.  17,  18S3. 

Pay  to  the  order  of  Cash'r  Bank  of  Georgetown  S20,  and 
charge  the  same  to  account  of 


To  Boyer,  Lundie  &  Co.,  | 

Denver,  Colo,  f 

This  is  for  traveling  expenses.     This  paper  is  paid. 
The  paper  in  paragraph  1246  is  endorsed  as  follows: 

"  r.iy  to  order  of  Sprague,  Warner  &  Co. 

Boyer^  Lundie  &'  Co." 

This  sum  ($260)  is  in  part  payment  of  the  paper  in  paragraph  1208. 

The  only  object  in  thus  endorsing  one  paper  as  a  payment  on  another  is 
to  give  to  the  person  who  receives  the  endorsed  paper  the  additional  se- 
curity of  the  name  of  the  maker  of  it. 

20th.  —  The  paper  in  paragraph  1240  is  endorsed  thus: 

**  Pay  order  of  B.  Cornforth. 

Boyer.,  Lundie  (S^  C(7. " 

This  is  for  a  payment  on  account,  $100. 

We  receive  from  Wm.  Dougherty  a  money  express  package  containing 
$302.35.  in  payment  of  our  bill  of  Mch.  17,  $305.40,  less  i  per  cent,  for  cash 
in  5  days,  $3.05.     We  pay  for  postage  stamps,  $10.     Cash  sales,  $175.35. 

21st. — We  give  to  J.  S.  Brown  &  Bro.  our  check  for  $460.85,  in  payment 
«f  their  bill  of  Mch.  14,  $465.50,  less  i  per  cent,  for  cash  in  lO  days,  $4.65. 

1273,  Denver,  Colo.,  Mch.  3,  1883. 
Sixty  days  after  date  we  promise  to  pay  to  the  order  of 

Catlin  Tobacco  Co.  $299- 

Boyer^  Lundie  ^5^'  Co, 

1274.  Golden,  Colo.,  Mch.  17,  18S3. 
Thirty  days  after  date  I  promise  to  pay  to  the  order  of 

Boyer,  Lundie  &  Co.  $26.50. 

S.  E.  Rogert. 

275 


1275—1278 

DOUBLE    ENTRY    BOOK-KEEPING. 

1275.  22d. — We  receive  from  Long  Bros.,  Kansas  City,  Mo.,  lOO  bbls. 
Apples  @  $2.50  on  sale,  $250;  we  pay  freight  on  same,  $  10.20.  Our 
understanding  with  Long  Bros,  is  as  follows:  We  are  to  pay  them  $2.50  a 
barrel  for  all  we  sell,  and  for  such  as  may  spoil  on  our  hands  we  are  to  pay 
them  nothing;  we  are  not  to  pay  for  the  apples  until  they  are  sold,  hence, 
they  are  "on  sale;"  they  (Long  Bros.)  are  to  pay  all  exjienses  incurred 
and  are  also  to  pay  us  for  storing  the  apples. 

Since  we  do  not  care  to  know  (as  we  did  on  the  "  Super  X  "  Flour)  how 
much  we  make  on  these  apples,  we  enter  the  amount  of  the  bill,  $250,  in  the 
same  manner  as  we  enter  any  other  merchandise  bill,  adding,  however,  in  the 
"  Explanation  "  column  of  the  Ledger  on  the  line  with  the  credit  to  Long 
Bros,  the  words,  "  On  sale:"  thus,  showing  that  this  account  is  not  to  be  paid 
until  the  articles  for  which  it  is  credited  are  all  sold,  —  thereby  making  it,  as 
far  as  its  credit  is  concerned,  only  a  memorandum  account.  Where  a  firm  is 
in  receipt  of  many  such  consignments,  accounts  are  not  kept  in  this  manner, 
but  according  to  the  method  described  in  246  to  261. 

We  use  our  truck  for  carting  Long  Bros.'  apples  from  the  freight  depot  to 
our  warehouse  and  charge  $2.50  therefor.  Cash  sales,  $145.65.  W.  D.  Boyer 
draws  $30. 

23d.  —  We  sell  to  Wm.  S.  Farley  on  account  one  of  our  office  desks,  $15. 

1276.  Denver,  Colo.,  Mch.  17,  1SS3. 
Thirty   days   after   date   pay  to   the   order  of  ourselves 

$173.85,  and  charge  the  same  to  account  of 

Boyer,  Lundie  iS^  Co. 

To  Berlin  &  Co.,  | 

Boulder,  Colo,  f 

Written  across  the  face  of  the  above  in  red  ink  is  : 

"Accepted,  Mch.  19,  1883.     B^r/in  &-  Co." 

1277.  Denver,  Colo.,  Mch.  12,  1883. 
Thirty  days  after  date  pay  to  the  order  of  The  Sttuby- 

Estabrook  Mercantile  Co.  $255.35,  and  charge  the  same  to 
account  of  B.   Cornforth. 

To  Boyer,  Lundie  &  Co.,  ) 

Denver,  Colo,  f 

Written  across  the  face  of  the  above  in  red  ink  is  : 

"Accepted,  3/23/S3.      Bayer,  I.uniiie  i^'  Co." 

24th. — James  Gregg,  a  carpenter,  makes  some  new  shelves  for  us  and 
takes  as  payment  for  his  bill  groceries  to  the  value  of  $12. 

1278.  Denver,  Colo.,  Mch.  24,  1S83. 

«    Thr3e  months  after  date  1  promise  to  p.ny  to  the  order  of 
Boyer,  Lundie  &  Co.  $240. 

O.  S.  Parker. 

276 


1279-1282 

DOUlil.E    ENTRY    nOOK-KEElINC. 

Tnis  paper  is  for  2  of  our  Colorado  National  Bank  shares  («)  $I20. 

We  pay  for  advertising  in  the  "  News,"  $12.50.     Cash  sales,  $  1 18.15. 

26th. — We  on  this  day  learn  that  S.  E.  Rogers,  of  Golden,  has  not  only 
failed  but  "  skipped "  for  "  fields  green  and  pastures  new."  The  paper  in 
paragraph  1274  is  therefore  worthless,  $26.50.  We,  pay  for  i  set  of  single 
harness,  $20;   i  set  of  double  harness,  $35. 

1279.  E.  D.  Wright  reports  to  us  through  the  mail  that  he  has  collected 
fromC.  R.  Welch  theamount  of  our  account  against  him,  $28.60,  less  60c.  which 
Welch  claimed  as  an  overcharge  on  2  boxes  Layer  Raisins,  and  which  he 
(Wright)  allowed.  Wright  being  in  need  of  money  both  for  personal  use  and 
for  traveling  expenses,  reports  that  of  the  $28  collected  from  Welch  he  has 
taken  $10  for  his  personal  use  and  that  he  will  use  the  remainder  for  traveling 
expenses.  (Enter  all  of  this  transaction  in  the  Cash  Book,  as  though  we  had 
received  direct  from  Welch  the  full  amount  of  his  bill,  $28.60,  returned  to 
him  60c.  for  overcharge,  and  sent  the  $28  to  Wright.) 

27th. — We  sell  goods  on  account  to  Wm.  Dougherty,  60  ds.,  book  i,  page 
20,  $195.30;  Berlin  &  Co.,  30  ds.  or  1/5,  book  3,  page  22,  $126.85  ;  Clark  & 
Tweed,  90  ds.,  book  3,  page  26,  $307.25 — total,  $629.40. 

28th.  —  The  balance  due  on  the  paper  in  paragraph  1208  is  paid,  $290; 
the  paper  in  paragraph  1233  is  also  paid,  $220.50.  The  exchange  and  collec- 
tion charges  on  the  latter  paper  are  75c.,  which  are  paid.  The  paper  in 
paragraph  1242  is  due  to-day  and  settlement  is  made  therefor  as  follows: 
$1.83  in  currency  for  the  interest  due,  and  the  following  for  the  face  value  of 
the  paper: 

1280.  Denver,  Colo.,  Mch.  28,  1883. 
Sixty  days  after  date  we  promise  to  pay  to  the  order  of 

B.  Cornforth  S200,  with  interest  at  10  per  cent. 

Boyer^  Lundie  ^  Co, 

1281.  We  receive  $200  in  currency  as  a  payment  on  the  paper  in  para- 
graph 1243,  which  paper  it  will  be  seen  by  referring  to  Mch.  17,  we  deposited 
in  our  bank,  where  it  is  now  held.  We  consequently  make  no  entry  for  these 
$200,  but  merely  take  them  over  to  the  teller  of  our  bank  and  see  that  he* 
endorses  the  amount  as  a  payment  on  that  paper. 

Cash  sales,  $137.80. 

29th.  We  receive  from  R.  J.  Gluckler,  attorney,  a  check  for  $40,  being  a 
payment  on  I.  R.  Morrison's  account,  which  was  sent  to  Gluckler  for  collec- 
tion on  March  loth. 

1282.  Leadville,  Colo.,  Mch.  17,1883. 
Sixty  days  after  date  we  promise  to  pay  to  the  order  of 

Boyer,  Lundie  &  Co.,  $432.05. 

Clark  &•  Tweed. 

30th.  The  paper  in  paragraph  1210  is  paid,  $150;  as  likewise  that  in 
paragraph  1245,  $178.30.     Cash  sales,  $142.60. 


1283—1381 

DOUBLE   ENTRY   BOOK-KEEPING. 

31st.  Geo.  A.  Turner  being  unable  to  pay  to-day  the  balance  due  on  the 
paper  in  paragraph  1243,  it  is  protested  for  non-payment.  The  balance  on 
this  paper  is  (see  March  17)  $^S6.y$  ;  the  interest  to  date,  $5.21  ;  the  protest 
fees,  $2 — "total,  $393.96.  We  give  our  bank  a  check  for  this  latter  amount, 
take  the  paper  and  put  it  in  our  safe,  where  we  will  hold  it  until  we  can  effect 
a  settlement  with  Turner.  He  tells  us  that  he  will  be  able  to  raise  the 
money  within  ten  days. 

1283.  It  is  sometimes  wiser  to  hold  a  past  due  note  than  it  is  to  take  a 
new  note  as  a  renewal,  because  a  suit  can  be  begun  at  any  time  on  the 
former  while  it  cannot  be  begun  on  the  latter  until  it  becomes  due. 

The  paper  in  paragraph  1252  is  paid,  $2,000;  also,  the  interest  thereon, 
$18.33.  Berlin  &  Co.'s  account  is  past  due, —  enter  $2.0;  as  interest  on  it. 
Austin,  Reynolds  &  Co.  (livery-stable  keepers)  render  to  us  a  bill  for  the 
stabling  and  feeding  of  our  horses  for  one  month,  $35,  which  we  do  not  pay 
but  which  we  enter.  R.  J.  Gluckler  renders  to  us  his  bill  for  attorney  fees  to 
date  in  the  matter  of  Boycr,  Lundie  &  Co.  vs.  I.  R.  JMorrison,  $10,  which  we 
do  not  pay,  but  which  we  enter.  We  charge  Long  Bros.  $4  for  storage  of 
their  apples  to  date.  By  referring  to  the  entry  of  March  22  it  will  be  seen 
where  these  apples  were  stored.  The  bills  which  have  accumulated  to  date 
are  as  follows:  J.  K.  Armsby  &  Co.,  30  ds.,  3/19,  $160.30;  B.  T.  Babbitt,  90 
ds.,  3/15,  $410.50;  J.S.Brown  &  Bro.,  3/26,  $650;  Catlin  Tobacco  Co., 
60  ds.,  3/20,  $224.35;  Sprague,  Warner  &  Co.,  3/24,  $34575 — total, 
$1,790.90.  The  salaries  for  the  past  month  are  as  follows:  W.  D.  Boyer,  $75  ; 
C.  M.  Lundie,  $75  ;  G.  H.  Atwood,  $75  ;  Ed.  Sloan,  $60 ;  E.  D.  Wright,  $50; 
J.  H.  Goodwin,  $60;  Frank  Cook,  $35 — total,  $430.  The  wages  of  our  truck= 
man,  Fritz  Krause,  are  $40  for  the  month  —  see  March  8th. 

THE   END   OF  THE  YEAR. 

1284.  The  figures  for  the  closing  of  the  books  this  "year"  are  as  follows: 
Cash  Book. —  Footing  of  "Mdse.  Cr."  column,  $1,931.95;   "Interest  Cr.," 

$21.43  ;  total  of  "Miscel.  Cr."  column,  including  the  two  preceding  amounts 
■and  the  balance  on  hand  March  i  ($6,147.76),  $15,103.80;  footing  of  "Expense 
Dr."  column,  $46.80;  of  "Interest  Dr."  column,  $26.76;  total  of  "Miscel.  Dr." 
column  after  the  two  preceding  amounts  have  been  placed  therein,  $10,071.37; 
balance  of  cash  on  hand,  $5,032.43. 

Journal. — Total  of  "Mdse.  Dr."  column,  $4,484.35  ;  total  of  "Mdse.  Cr." 
column,  $3,102. 

Ledger.— Footing  of  figure  trial-balance,  $21,753.59. 

Inventory. — -Groceries  on  hand,  $2,500  (see  below);  Fixtures,  $430; 
Horses  and  Wagons,  $600  ;  Colorado  National  Bank  Shares,  $330;  Little  Giant 
Mining  Shares,  $600;  Insurance  Unexpired,  $17.50. 

Before  closing  the  Merchandise  account  this  year,  balance  the  Discount, 
Drayage,  and  Freight  and  Express  accounts  and  carry  the  amounts  lost 
thereon  to  the  Merchandise  account.     (Sec  74  and  207.) 


1285-1287 

DOUni.E   ENTRY   BOOK-KEEI'ING. 

The  remainder  of  Long  Bros.'  apples  are  included  in  the  Mdse.  inventory, 
therefore,  nothing  will  be  done  with  their  account  until  all  the  apples  are 
disposed  of. 

The  unexpired  taxes  might  be  included  in  the  inventory,  but  since  this  is 
seldom  done,  the  entire  amount  paid  therefor  will  be  at  once  treated  as  lost. 
(See  i88  and  185.) 

Loss  AND  Gain  Account. — The  net  loss  for  the  firm  is,  $240.26,  which 
sum  is  shared  pro  rata  according  to  the  several  investments  as  they  stood  on 
March  i. 

Private  and  Stock  Accounts. — The  figures  for  these  accounts  will  not 
be  given  here,  because  it  is  thought  best  to  allow  the  student  to  "try  his 
hand  on"  the  figuring  out  of  each  partner's  share  of  this  loss,  which  he 
rnay  do  according  to  the  method  given  in  1 135. 

Trial  Balance.  —  Totals  of  trial-balance  taken  after  the  books  are 
closed,  $21,335.58. 

Statistical  Statement.— Continue  the  statistical  statement  begun  last 
year  by  adding  this  year's  figures  to  it.  The  present  worth  of  the  firm 
at  the  beginning  of  the  new  year  (April  i)  is  $12,059.22. 


1285.  In  the  foregoing  examples  there  is  a  greater  variety  of  transac- 
tions than  nine  out  of  ten  book-keepers  meet  with  during  ten  years  of  service; 
therefore,  let  no  student  who  aspires  to  the  profession  of  book-keeping  be 
discouraged  when  he  encounters  this  set  in  which  many  difficult  exam- 
ples are  inserted  merely  to  test  his  ability  as  a  book-keeper,  and  which,  while 
they  possibly  may  occur,  probably  will  not  be  met  with  during  an  ordinary 
experience. 


MEMORANDA. 


1286.  You  may  at  some  future  time  have  occasion  to  remember  with 
regret  paragraph  1286  of  this  book — if  you  omit  to  write  on  some  important 
memorandum  at  least  the  month  and  the  day  of  the  month  upon  which  it  was 
made.  Memoranda  of  any  importance  whatsoever  should  bear  the  date  of 
their  making  in  figures  thus,  3/,j. 


CORRESPONDENCE. 

1287.  When  writing  a  business  letter  upon  several  subjects,  it  is  well  to 
number  each  paragraph  and  introduce  each  subject  briefly  at  its  opening,  as 
I.  Agency,  2.  Discount,   3.  Blank  Books. 

279 


1288 

DOUBLE   ENTRY   BOOK-KEEPING. 


COLLECTION  OF  TIME  BILLS. 


12SS.  In  a  house  where  goods  are  sold  on  time,  and  where  it  is  desired 
that  bills  shall  have  prompt  attention  as  they  fall  due,  the  following  metliod 
will  be  found  useful. 

{a). — Have  a  Collection  Book  ruled  with  sixteen  single  columns  on  a  page; 
reserve  a  double  page  for  each  month,  writing  in  its  upper  left  and  right  hand 
corners  the  name  of  the  month ;  at  the  top  of  the  columns  have  printed  or 
written  the  figures  for  the  days  of  the  month — in  the  same  manner  as  shown 
in  the  Bill  Book  form  at  the  end  of  this  book.  (Instead  of  having  a  book 
made  to  order  for  the  purpose,  this  Bill  Book  may  be  used  as  a  Collection 
Book.) 

{l>). — After  the  posting  is  done,  take  the  book  from  which  the  sales  were 
posted — the  Sales  Book  or  the  Journal,  as  the  case  may  be — and  from  it,  enter 
in  the  Collection  Book  under  the  respective  date  when  each  bill  falls  due,  the 
folio  of  the  Ledger  to  which  it  was  posted,  and  the  folio  of  the  book  from 
which  the  posting  was  made.  For  example:  on  the  page  of  this  Collection 
Book  reserved  for  March,  1889,  in  the  column  under  "  10"  we  place,  ="%,o — to 
indicate  that  on  the  lOth  of  March,  1889,  we  should  refer  to  Ledger  page  218, 
and,  with  the  finger  on  the  folio  column  of  the  debit  side  of  that  page,  run 
down  until  we  come  to  "420"  and  there  we  will  find  a  bill  which  falls  due  on 
that  date. 

(c). — An  ordinary  diary  will  answer  the  purpose  of  a  Collection  Book,  but 
it  is  not  so  convenient  as  a  book  ruled  in  the  way  above  described,  because 
of  the  necessity  of  having  to  turn  backward  and  forward  from  date  to  date. 

(</). — Where  one  of  the  methods  of  checking  paid  bills  referred  to  in  para- 
graphs 948  and  1029  is  used,  the  bills  which  have  been  entered  in  this  Collec- 
tion Book  and  subsequently  paid  will  be  clearly  indicated  on  the  accounts  in 
the  Ledger  by  the  "settlement  checks." 

[e). — Every  day  this  Collection  Book  is  taken  up  and  the  Ledger  folios  indi- 
cated in  the  column  under  the  current  day  are  referred  to.  When  it  is  ascer- 
tained that  a  bill  has  been  paid,  the  folio-figures  therefor  are  cancelled  in  red 
ink  in  this  book.  Then,  for  the  bills  which  have  not  been  paid,  statements 
are  sent  out  or  sight  drafts  made,  as  the  case  may  require. 

(/). — When  all  the  bills  under  a  certain  date  are  paid,  a  large  red  check 
should  be  made  at  the  top  of  the  column  over  that  date  to  indicate  the  fact. 

{g). — Past  due  bills  may  be  cancelled  in  this  book  at  the  time  of  their  pay- 
ment, or  at  subsequent  periodical  examinations  when  it  is  learned  that  they 
have  been  paid. 

(/i). — Bills  which  are  long  pa.st  due  should  be  entered  in  a  book,  with  the 
name,  amount,  and  due  date.  This  book  may  be  labelled  "  Bills  Long  Past 
Due,"  or  with  some  similar  title,  and  it  should  be  submitted  to  the  firm  for 
advice  as  to  what  disposition  to  make  of  the  several  past  due  bills. 

280 


1289 


DOUBLE   ENTRY   BOOK-KEEPING. 


STATEMENT  I'RUOF  UF  CUSTOMERS'  ACCOUNTS. 

1289.  In  retail  houses  where  charge  and  credit  tickets  are  used  instead  of 
Sales  Books  and  Journals,  and  where  they  are  satisfied  with  the  entries  on 
such  tickets  as  their  only  record  of  charges  and  credits,  much  time  and  expense 
may  be  saved  by  the  following  method : 

(a). — Use  the  following  form  of  Sales  Ledger  in  the  manner  illustrated, 
having  double-account  ruling  as  in  paragraphs  1 1 12  and  1 1 13. 


SALES   LEDGER. 


i 

Date. 

Clerk  No. 

Ticket  No. 

^ 

Credit. 

«^| 

.88,. 

Feb-y. 

28 

20 

SO 

March 

7 

27 

'4 

-7 

28 
62 

84 
t6 

7 
30 

7S 
80 

40 

25 

' 

6a 

38 

23 

65 

4 

75 

57 

95 

78 
3 

45 
80 

74 

65 

Post  from  the  charge  and  credit  tickets  direct  to  this  Ledger  as  above, 
placing  on  such  tickets  in  the  upper  left-hand  corners — either  before  or  after 
posting — the  Ledger-folios  of  the  respective  accounts. 

(^). — Have  statements  ruled  with  three  money-columns — the  first,  for  the 
extensions  or  the  separate  debit  items  of  each  charge  for  the  current  month  ; 
the  second  and  third  columns  to  correspond  in  use  with  the  second  and  third 
money-columns  of  the  Sales  Ledger. 

(c). — On  the  first  of  the  month  start  a  statement  or  itemized  bill  for  each 
account  in  the  Ledger  which  has  been  affected  by  the  day's  charges  or  credits, 
by  writing  in  the  upper  right-hand  corner  of  the  statement  the  folio  of  the 
Ledger.  The  customer's  name  and  the  date  which  the  statement  should  bear 
when  sent  out,  are,  of  course,  also  written  on  each  new  statement.  After 
having  left  one  blank  line  below  the  headline  for  the  balance  of  the  preceding 
month,  enter  the  items  of  all  the  charge  and  credit  tickets  for  the  day  directly 
from  the  tickets  on  to   the   respective  statements  to   which  they  belong,  as 


281 


1290 

DOUBLE   ENTRY   BOOK-KEEPING. 

indicated  by  the  Ledger-folios  written  on  the  tickets,  extending  the  amounts 
into  the  first  and  second  columns  of  the  statement,  as  in  paragraph  1077. 

The  old  balance  is  usually  left  until  the  end  of  the  month,  for  the  reason 
that  sometimes  a  customer  comes  in  during  the  month  to  settle  in  full  of 
account  for  the  preceding  month's  statement,  in  which  case  the  balance  then 
paid  is  not  brought  forward  on  to  the  new  statement. 

(^).— After  all  the  charge  and  credit  tickets  for  the  day  have  been  entered 
on  the  statement,  tie  them  up  in  a  bundle  and  write  on  it  the  date — then 
put  the  bundle  in  the  safe  or  vauh  ;  because  these  tickets  are  the  only  records 
of  the  sales  which  are  preserved. 

(f)._At  the  end  of  the  month  let  such  old  balances  as  have  not  been  set- 
tled during  the  month  be  placed  at  the  top  of  the  new  statements  and  extended 
into  the  third  or  balance  column.  Then  let  the  book-keeper  foot  the  first  and 
second  columns  in  the  Sales  Ledger,  while  the  statement-clerk  foots  the  first 
and  second  columns  of  the  statements.  As  they  proceed  with  these  additions, 
let  them  compare  footings.  When  the  debit  footings  on  Sales  Ledger  and 
statement  agree,  let  the  extensions  be  made  into  the  third  column,  and  this 
footing  or  aggregate  sum  be  added  to  the  old  debit  balance;  then,  let  the 
footings  of  the  credit  columns  of  Sales  Ledger  and  statement  be  compared, 
and  if  they  agree,  be  extended  into  the  third  column  and  deducted  from  the 
amount  above.     The  remainder  will  be  the  present  balance. 

When  the  Sales  Ledger  balance  for  a  certain  account  agrees  with  the  state- 
ment balance,  that  account  is  supposed  to  be  correct. 

(/)._Should  the  Ledger  and  statement  balances  fail  to  agree  on  any 
account,  the  total  of  each  charge  on  the  statement  is  ascertained  and  the 
same  is  compared  with  the  separate  items  on  that  account  in  the  Ledger. 
When  the  item  causing  the  difference  is  found,  the  ticket  therefor  is  procured 
and  the  difficulty  adjusted  by  correction  of  the  Ledger,  statement,  or  ticket, 
as  the  case  may  be. 

(^). — That  they  may  be  easy  of  access  and  quickly  found,  the  statement- 
blanks  should  be  all  of  the  same  length,  kept  in  a  box,  and  placed  upon  end, 
with  their  heads  projecting  about  two  inches. 

ANOTHER    METHOD. 

1290.  By  adding  another  column  to  the  form  illustrated  in  paragraph  1077 
the  preceding  method  of  proving  the  Sales  Ledger  and  statements  may  be 
applied  to  the  method  described  in  paragraphs  1076  to  1084. 

In  order  that  the  method  described  in  paragraph  1289  a  to  ^  may  be  the 
more  fully  appreciated,  it  is  considered  advisable  here  to  indicate  its  specific 
advantage,  which  is,  the  reduction  in  the  number  of  book-keepers  required, 
and  the  consequent  lessening  of  expenditure  in  salaries.  In  the  use  of  the 
method  described  in  paragraphs  1076  to  1084,  additional  book-keepers  are 
required  to  copy  the  charge  and  credit  items  from  the  tickets  in  the  Ledger. 

282 


DOUHLE    ENTRY   BOOK-KEEPING. 

while  in  the  use  of  the  method  described  in  paragraph  1289  «  to  ^  the  extra 
labor  required  for  the  copying  of  those  items  is  avoided. 

The  additional  expense  attending  the  extra  precautions  in  the  safe  keep- 
ing of  the  tickets,  and  the  slight  risk  of  losing  a  ticket  or  two  during  the  year, 
as  weighed  against  the  increased  expenditure  in  salaries — is  the  matter  for  con- 
sideration here  suggested  to  business  men  who  are  economically  inclined.  To 
{he  latter  it  may  also  be  remarked  that  much  money  may  be  saved  in  the 
employment  of  a  boy  or  girl  statement-clerk  for  the  making  out  of  statements, 
instead  of  allowing  the  book-keeper  (at  a  salary  of  two  or  three  times  as  much 
as  would  have  to  be  paid  to  the  statement-clerk)  to  use  time  for  the  making 
■  out  of  statements  which  could  otherwise  be  spent  on  his  Ledger. 

ANOTHER  METHOD. 
1291.  In  houses  where  proof  of  the  correctness  of  the  work  is  considered 
unnecessary,  much  additional  time  and  labor  may  be  saved  by  adopting  the 
method  described  in  paragraph  1289  a  to  ^—excepting  that  portion  of  it  which 
relates  to  the  Sales  Ledger,  in  which,  by  this  method,  no  posting  is  made  to 
the  Sales  Ledger  until  the  end  of  the  month,  at  which  time  mere!)'  the  debit 
aggregate,  credit  aggregate,  and  present  balance  of  each  statement  are  posted 
to  the  statement's  corresponding  account  in  the  Sales  Ledger. 


PROVING  POSTINGS  AND  LEDGER-BALANCES. 

1292.  \\\  any  house  where  monthly  statements  are  rendered,  the  following 
method  may  be  adopted,  with  but  very  little  additional  work,  to  prove  all  the 
postings  and  all  the  Ledger-balances. 

{a). — Start  a  statement  for  not  only  each  customer's  account,  but  for  every 
open  account  in  the  Ledger,  as  Mdse.,  Expense,  Salaries,  etc. — after  the  man- 
ner  described  in  paragraph  1289  b  and  c. 

{b). — After  having  posted  to  the  Ledger,  post  from  the  same  books  (Jour- 
nal, Cash  Book,  Sales  Book,  etc.)  direct  to  the  statements.  When  there  is 
more  than  one  account  on  any  page  in  the  Ledger,  indicate  that  fact  by 
letters  in  the  Ledger,  in  the  folio-column  of  the  book  from  which  the  posting 
«s  made,  and  on  the  statement.     For  example,  "  287  a"  "  287  b,"  and  so  on. 

(c).-^Same  as  paragraph  1 289/and  ^.  Statements  for  other  than  customers' 
accounts  need  not  be  started  anew  for  the  first  of  each  month,  but  may  be 
allowed  to  lemain  in  the  box  until  they  are  full  of  entries. 

{d). — The  only  things  which  this  method  does  not  prove  are  the  additions 
and  forwardings  on  the  books  from  which  postings  are  made,  so  that  when  the 
trial-balance  does  not  "  come  out,"  these  are  the  only  things  to  be  examined 
in  order  to  discover  the  error. 

283 


DOUBLE   ENTRY   BOOK-KEEPING. 


DETECTION  OF  ERRORS  IN  POSTING. 

1293.     To  detect  an  error  in  posting — 

(a). — Take  a  sheet  of  paper  and  write  on  it  the  Ledger-fohos  of  all  the  live 
accounts,  one  below  the  other,  in  columns  about  two  inches  apart,  ruling  a 
perpendicular  line  at  the  right  of  each  of  these  columns  of  figures. 

(^.) — Name  mentally  the  position  of  the  first  single  figure  at  the  left  of  the 
sum  in  the  trial-balance  error — thus :  if  the  error  be  $24.85,  say  the  error 
affects  the  tens  of  dollars;  if  $4.85,  say  it  affects  the  units  of  dollars ;  if  85 
cents,  say  it  affects  the  tens  of  cents ;  if  5  cents,  say  it  affects  the  units  of  cents. 

ic). — Turn  to  the  books  from  which  the  postings  were  made  and  take  ofT 
therefrom  onl}'  the  figures  found  in  the  position  tnentally  named  (as  above), 
placing  each  of  such  figures  on  the  sheet  after  its  proper  Ledger-folio. 

ILLUSTRATION. 
id). — Suppose  the  error  in  the  trial-balance  to  be  $24.85.     For  example,  to 
illustrate  the  method,  see  page  80,  this  book.     According  to  ''b"  above,  the 
only  figures  we  would  take  from  this  page  of  the  Journal  would  be  the  follow- 
ing: 


L.F. 


(DR.  SIDE.) 
Tens  of  Dollars. 


(CR.   SIDE.) 
Tins  of  Dollars. 

58 


{e)^ — After  having  begun  at  the  first  of  the  month  and  gone  entirely 
through  it  with  all  the  books  from  which  postings  were  made  (which  was  not 
done,  of  course,  in  the  illustration  above  given),  turn  to  the  pages  of  the 
Ledger  which  have  had  entries  made  upon  them,  as  indicated  by  such  folios 
as  have  figures  opposite  them  on  the  right  of  the  perpendicular  line,  and  com- 
pare those  figures  with  the  figures  in  the  same  position  (tens  of  dollars)  in  the 
Ledger;  when  these  figures  agree,  draw  a  line  through  the  "  tens  figures"  on 
this  proof-sheet ;  when  they  do  not  agree,  turn  back  to  the  folio  of  the  book 
from  which  the  posting  was  made,  as  shown  in  the  folio-column  of  the  Ledger 
opposite  to  that  incorrect  "  tens  figure,"  and  the  error  will  be  found. 

(/). — In  the  foregoing  illustration,  the  figures  9  and  5  after  folio  41  are 
to  be  found  in  the  "tens  figures"  of  paragraphs  609  and  595;  the  figures 
I,  4,  2,  and  3  after  folio  44,  in  the  "tens  figures"  of  paragraphs  708,  709,  716, 
and  692 — and  so  on. 

{g). — In  applying  this  method,  examine  first  the  debits,  then,  if  the  error  is 
not  found,  the  credits. 


284 


1294—1296 

DOUBLE    ENTRY   BOOK-KEEPING. 

The  object  in  naming  the  figure  at  the  left  in  the  trial-balance  error  instead 
of  that  at  the  right,  is  because  there  will  be  fewer  postings  to  examine  in 
order  to  locate  the  error  than  there  would  be  if  the  jinits  of  cents  were  named. 
It  is  consequently  obvious  that  the  more  figures  there  are  involved  in  the 
error  the  easier  it  will  be  to  locate  it. 

(/^). — (Sheets  specially  prepared  for  this  method,  ruled  and  printed  for  lOOO 
folios,  will  be  sent  upon  receipt  of  lO  cents  for  each  sheet.) 


TAKING  OFF  TRIAL-BALANCES.    . 

1294-.  Much  time  may  be  saved  in  taking  off  trial-balances  by  the  adop- 
tion of  the  following  method  : 

(a). — Take  one  of  the  sheets  mentioned  in  paragraph  1293  /«,  turn  to  the 
books  from  which  the  postings  were  made  during  the  month  and  cancel  on 
this  sheet,  from  the  folio-columns  of  such  books,  all  the  Ledger-folio  numbers 
therein  found. 

(U). — Take  the  trial-balance  of  the  preceding  month  (upon  which,  in  order 
to  use  this  method,  the  Ledger-folios  should  be  written),  and  with  this  sheet 
by  the  side  of  the  new  trial-balance,  copy  from  the  old  trial-balance  on  to  the 
new  all  the  amounts  in  the  old  trial-balance  which  are  opposite  to  the  folios 
corresponding  with  the  //^/cancelled  numbers  on  this  sheet,  referring  to  the 
Ledger  whenever  you  come  to  a  cancelled  number  for  the  present  balance  of 
the  account  indicated  by  that  number. 

ic). — Thus,  the  time  of  turning  over  the  Ledger  leaves  and  of  looking  up 
the  balances  which  have  not  been  changed  during  the  month  will  be  saved — 
only  such  accounts  being  referred  to  as  have  had  entries  made  on  them  during 
the  month. 

Care  must  be  exercised  in  the  cancelling  of  the  folio-numbers  to  see  that 
all  such  as  are  written  in  the  folio-columns  are  cancelled  on  this  sheet. 

By  this  method  when  there  is  an  error  in  the  trial-balance  the  only  accounts 
which  will  have  to  be  examined  are  those  indicated  by  the  cancelled  numbers 
on  this  proof-sheet. 

(By  using  Raymond's  Labor-Saving  Trial  Balance  book  the  folios,  men- 
tioned in  "  <J"  above,  have  to  be  written  only  once  a  year.) 


AIDS  TO  THE   LEARNING   OF   BOOK-KIiEITNG. 

1295.     The  following  forms,  when  kept  constantly  before  the  beginner,  will 
tend  greatly  to  facilitate  his  acquisition  of  the  science  of  book-keeping. 


12D5 


DOUBLE   ENTRY   BOOK-KEEPING. 


DEBIT 

WHAT   WE 

RECEIVE. 

When  we  receive   Nothing,  we  debit  The 

Person  with  whom  we  are  transacting 

the  business. 

Resources  and  Losses 

ARE  ALWAYS 

DEBITED. 

CREDIT 

WHAT  WE 

GIVE. 

When  we   give   Nothing,   we  credit  The 

Person  with  whom  we  are  transacting 

the  business. 

Liabilities  and  Gains 

ARE  ALWAYS 

CREDITED. 

account's 

DEBITED. 

PAR. 
NOS. 

JOURNAL    ENTRIES. 

Account  to  be  Debited.   I    Account  to  be  Credited. 
mis  '^ecdvahk  ^^  ^^  S.  W.  S&nnelt 

PAR. 
NOS. 

ACCOUNTS 
CREDITED. 

ZOO 



TOS 

77r 

200 



Dr.  to 



Dr.  to 

Di 

CASH    TRANSACTIONS. 


Di 


Cash. 


Cash. 


CASH  RECEIVED. 

CASH  IS  DEBITED  hy  simplv  making  tht 
ftttn'  on  this,   the    Debit   side  of  the   Cash 
Book  ;  therefore,  in  order  to  make  the  Double 
Entry,  we  write  here  in  the  first  space,   the 
name  of  the 

ACCOUNT   TO   BE   CREDITED; 

and.  in  the  second  space,  the  Explanatioti  of 
the  Transaction. 

O 
O 
CQ 

X 
Ui 

H 

u 

CASH   PAID   OUT. 

CASH  IS  CREDITED  by  nmply  making 
the  entry  on  this,  the  Credit  side  of  the  Cash 
Book  ;  therefore,  in  order  to  make  the  Double 
Entry,  we  write  here   in   the  frst  space,   the 
name  of  the 

ACCOUNT   TO    BE    DEBITED; 

and,  in  the  second  space,  the  Explanation  of 
the  TranstuHon. 

iFirst  Space  in  Cash  Book.) 

AMOUNT. 

(First  Space  in  Cash  Book.) 
Account  to  be  Debited. 

AMOUNT. 

Account  to  be  Credited. 

286 


121)(> 


DOUBLE   ENTRY   BOOK-KEEPING. 

The  forms  on  preceding  page  should  be  referred  to  for  every  entry  and 
especially  whenever  a  transaction  comes  up  which  puzzles  the  student. 

(In  order  that  he  may  the  more  readily  learn  how  to  make  Journal  and 
Cash  Book  entries,  slips  like  the  forms  on  preceding  page  have  been  printed 
and  made  into  pads.  These  pads  will  be  sent  postpaid  to  such  persons  as 
may  require  them  at  20  cents  each,  or  40  cents  for  the  two.  These  procured, 
the  student  should  first  make  his  entries  on  the  pads  and  afterward  in  the 
Journal  or  Cash  Book,  as  the  case  may  be.  Before  writing  on  a  pad,  the 
student  should  carefully  read  the  matter  at  the  top  of  it,  when  he  will  at 
once  realize  its  value  and  importance  as  an  aid  to  his  study. 

Where  'tis  thought  that  it  will  be  sufificient,  an  exact  copy  of  the  preced- 
ing page  printed  on  a  heavy  card  will  be  sent  upon  receipt  of  10  cents.  This 
procured,  the  student  can  stand  it  upon  end  before  him  on  the  desk  while 
studying  or  at  work.) 

The  columns  "  Par.  Nos.  for  Dr."  and  "  Par.  Nos.  for  Cr."  on  the  Journal 
slip  are  for  the  paragraph  numbers  for  the  rules  given  in  "  The  Foundation  " 
for  the  debiting  and  crediting  of  the  accounts  for  which  you,  on  this  slip, 
write  the  debit  and  the  credit.  For  example,  see  "200 — 108  Bills  Receivable 
Dh  to  G.  W.  Bennett  171 — 200"  on  the  Journal  slip  (opposite  page),  and  para- 
graphs 373  and  108,  and  374  and  171  of  this  book. 


POSTING. 


1296,  (a). — Where  many  checks  are  given,  much  time  may  be  saved  by 
posting  direct  from  the  Check  Book  to  the  Ledger.  Where  this  is  done  the 
only  entries  that  are  made  in  the  Cash  Book  for  checks  given  are  such  as 
are  made  at  the  close  of  each  day,  when  the  total  amount  of  all  the  checks 
given  during  the  day  is  written  on  the  credit  side  of  the  Cash  Book,  thus: 
"Check  Nos to  . . . ."  and  the  aggregate  amount  of  those  checks. 

When  posting  thus,  the  Ledger-folio  should  be  placed  on  the  stub  of  the 
Check  Book. 

{b). — In  order  to  save  time  some  book-keepers  when  posting  omit  to  enter 
on  the  Ledger  the  folio  of  the  book  from  which  they  have  posted  the  transac- 
tion, believing  that  the  date  is  a  sufificient  guide  to  the  location  of  the  original 
entry. 

{c). — Some  book-keepers  argue  that  the  carrying  forward  of  the  footings  of 
the  extra  columns  in  the  books  from  which  the  postings  are  made  requires  as 
much  time  as  it  does  to  post  the  footings  of  each  separate  page.  Since,  there 
fere,  errors  may  occur  in  these  forwardings,  they  prefer  to  post  the  footings  of 
each  page  separately. 

287 


1297 


DOUBLE   ENTRY   BOOK-KEEPING. 


INCREASE  AND  DECREASE  STATEMENT. 

1297.  The  following  will  be  found  to  be  a  good  form  of  statement  to  show 
whence  arise  the  losses  and  gains  in  a  business,  as  affecting  its  Resources  and 
Liabilities. 

INCREASE  AND   DECREASE   STATEMENT. 


ASSETS  AND  LIABILITIES. 

LOSSES  AND  GAINS. 

Accounts. 

Dec.  1, 

1880. 

Jan.  I 

1881. 

Jan.  I, 

188?. 

Assets. 

TOTAI.. 

ASSETS. 

Total.      ; 

LOSSES.       1 

Gains. 

Per.  Accounts  Rec, 

738 

- 

04 

536 

96 

Bills  Receivable, 

Cash, 

3000 

— 

1449 
3776 

50 

390 

98 

776 

50 

Mdse., 

3376 

40J 

2212 

40 

•164 

- 

S.  &  O.  Fix., 

13° 

338 

- 

208 

- 

Fuel, 

20 

- 

'5 

- 

5 

- 

Insurance, 

27 

50 

27 

50 

U.  T.  Co.  Shares, 

9104 

40 

SCO 

_| 

8519 

46 

SCO 

36, 

- 

Total, 

Liabilities. 

L1AB1..ITI 

" 

Per.  Accounts  Pay., 

964 

40 

603 

- 

08 

Bills  Payable, 

1140 

■ 

2104 

40 

1062 

04 

i6«s 

36 

77 

96 

Total, 

Net  Worth,  12/1/80, 
1/1/81, 

«854 

oo 

6854 

to 

- 

Net  Loss, 

MS 

•096 

Total  Losses, 

"   Gains. 

I95« 

04 

19S» 

04 

Net  Loss, 

.45 

90 

See  paragraphs  348  to  369  for  Dec.  I,  1880,  Assets  and  Liabilities,  and 
paragraphs  812  and  925  for  Jan.  I,  1881,  Assets  and  Liabilities. 
In  the  "  Losses"  column  of  the  above  form  we  place  all  the 

DECREASES   IN   RESOURCES  and 

INCREASES   IN   LIABILITIES. 
In  the  "Gains"  column  of  the  above  form  we  place  all  the 

INCREASES   IN   RESOURCES   and 

DECREASES   IN    LIABILITIES. 


1298 

DOUBLE   ENTRY   BOOK-KEEPING. 

The  "increases"  and  "  decreases  "  on  preceding  page  are  ascertained  by 
finding  the  difference  between  the  several  items  of  X.\\q  present  Resources  and 
Liabilities  and  the  corresponding  items  of  the  Resources  and  Liabilities  of  the 
preceding  statement  or  closing  of  the  books. 


PROVING  SEVERAL  LEDGERS  SEPARATELY. 

1298.  In  a  business  which  requires  several  Sales  Ledgers  and  other  Ledg- 
ers, each  of  such  Ledgers  maj-  be  proved  independently  of  the  others  in  the 
following  manner : 

First. — Open  an  account  in  the  General  Ledger  for  each  of  the  other 
Ledgers,  and  debit  or  credit  the  same,  as  the  case  may  be,  for  the  debit  or 
credit  balance  of  the  aggregate  of  all  the  accounts  in  the  particular  Ledger 
which  the  account  thus  opened  represents. 

Second. — Have  a  special  column  for  each  of  the  Ledgers  in  all  the  books 
from  which  posting  is  done  ;  carry  forward  from  page  to  page  until  the  end  of 
the  month  the  footings  of  such  columns,  and  enter  the  aggregate  footings  of 
each  of  such  columns  in  the  General  Journal — by  so  doing  either  debiting  or 
crediting,  as  the  case  may  be,  the  proper  Ledger,  and  at  the  same  time,  debiting 
or  crediting  the  proper  accounts  in  the  General  Ledger,  as  Merchandise,  Cash, 
Interest,  Bills  Receivable  or  Bills  Payable — for  the  same  amount. 

ILLUSTRATION. 

a  Sundries  to  Mdse.  879,877.00. 

i  $32,780.00.  .A  to  G  Ledger.     (From  A  to  G  Journal.) 

c  23,245. 20..  H  to  N       "          (    "      H  to  N      "      .) 

d  23, -64.35.. O  to  Z       "          (    "      O  10  Z       "      .) 

e  S7.45.  .Purchase     "           (.Mdse.  returni;d  to  creditors.) 

(See  paragraphs  looi,  1002,  1005,  and  178.) 


/     S7o,2 

II. 15.   Cash  to  Sundries 

i" 

A  toG 

Ledger  S22. 420.15. 

/; 

H  to  N 

23.165.40. 

»• 

0  toZ 

22,934.65. 

J 

Purchase      "                 45.20. 

k 

General 

1,645.75. 

^Above  Items  are  from  their  respective  columns  in   the  Cash  Book.     See 
paragraphs  1027  and  io28^also  1026.) 

289 


1298 


DOUBLE   ENTRY   BOOK-KEEPING. 

S67.628.4O.  .Mdse.  to  Sundries. 

Purchase  Ledger  $67,545.83.  (From  Purchase  Journal.) 

A  to  G          "                  25.60.  (     "      Mdse.  Ret.     "    .) 

HtoN        "                 4212.  (     "         '■          "       "    .) 

O  to  Z          "                 14.S5.  (     "         "         "      "     .) 


(See  paragraphs  1034  to  1038.J 


f  Sundries  to  Cash,  5 

r  $55,042.15.  .Purchase  Ledger. 

s  34  20.  .A  to  G 

t  114.62.. HtoN 

K  17. 84.. O  to  Z 

V  3,400. — ..General 

w  7,000.  —  ..Private 


(Above  items  are  from  their  respective  columns  in  the  Cash  Book:  r — paid 
to  creditors;  s,  t,  u — refunded  to  customers;  v — general  expenses,  cash  pur- 
chases of  merchandise,  etc. ;  w — salaries,  amount  drawn  by  members  of  the 
firm,  etc.) 


Sundries  to  Sundries. 

S6,ooo.— 

.  Bills  Rec. 

5.18. 

.Mdse. 

215.69 

.Interest. 

460.85. 

.A  to  G  Ledger. 

45-75- 

.HtoN      " 

22.14. 

.OtoZ       " 

20,410. — . 

.Purchase    " 

To  Bills  Pay., 

"  Interest, 

■'  A  to  G  Ledger, 

"  H  to  N      " 

••  0  to  Z       " 

"  Purchase    " 

(Notes  received  from  customers.) 
(Allowance  on  an  A  to  G  Ledger  account.) 
(On  creditors'  accounts.) 
(Transfer  to  H  to  N.) 

(Transfer  to  O  to  Z,  $24.76  and  Int.  $20.99.) 
(Transfer  to  A  to  G.) 
(Notes  given  to  creditors.) 
$20,410. —     (Notes  given  to  creditors.) 
20.99    (On  H  to  N  accounts.) 
2,027.32     (Notes.  $2,000  ;  transfer,  $22.14  ;  al.,  $5.18.) 
2,460.85     (Notes  $2,000  ;  transfer,  $460.85.) 
2,024.76     (Notes,  $2,000  ;  transfer,  $24.76.) 
215.69     (Int.  on  creditors'  accounts.) 


(Above  items  have  been  entered  in  the  General  Journal  from  time  to  time 
during  the  month^thosc  which  belong  to  the  special  or  extra  Ledgers  having 
been  extended  into  their  respective  columns,  and  those  which  belong  to  the 
accounts  in  the  General  Ledger  having  been  extended  into  the  "  General 
Ledger  "  column.) 

Transfer  Journals  and  Bill  Books  are  sometimes  kept  and  posting  done 
directly  from  them,  but  in  the  above  illustration  all  the  transfers  and  entries 
for  notes  received  and  given  were  made  in  the  General  Journal. — See  para- 
graphs 1020  and  1030  to  1033. 


290 


DOUBLE   ENTRY   BOOK-KEEPING. 

(a/)  When  the  preceding  entries  have  been  posted  to  the  General  Ledger, 
the  several  Ledger-accounts  and  balances  thereof  in  the  General  Ledger  will 
appear  as  follows : 

A  TO  G  Ledger. 


Mch  I,  1889.     (Supposed  Dr.  Bal.)  114,386.20     Mch.  30,  1889. 

"  30,  .889.  *  32,780.—         "     30.  '889. 


147,661.25 


123,188.18 


H  TO  N  Ledger. 


87,416.35     Mch.  30,  1889.  k  23,165.40 


23.245-: 
114.62 
45-75 


•'     3°, 'I??.  nf'R 


?,*^'"s 


O  TO  Z  Ledger, 


Mch.  I.  1889.  (Supposed  Dr.  Bal.)  128,325.40  I  Mch.  30, 1889.  /  22,934.65 

"    50,1889.  </  23,764-^-5        ".     30.1889.  >.  14-85 

•■i!"-  ".  "'■**  3°;  ft??-  Or'^al.  r=7:??t'47 


.889. 


52,12973  152.n9.73 

27,155-47 


Purchase  Ledger. 


87.4s  I  Mch.    I,  1889.  (Supposed  Cr.  Bal.)  78,360.2* 

55,042.15      "   30,1889.              y  45.20 

??,A!9-3r              30.1889.                   >'i  67,545.83 

.'Z^tLiL           30,  '889.                .iX-  215.69 

146,166.96 146,166.96 

j  Apr.  1, 1889.                 '  Bal.  70,627.36 


Private  Ledger. 

Mch.^o,  ^.  Cr.  ffal.  ^^^'SSo:^     Mch.  1. 1889.        (Supposed  Cr.  Bal.)       340,260.45 


33?,'!^.45 

Mch. 

.  1889.        ( 

,40,260.45 

Apr.. 

1889. 

291 


1298 


DOUIiLE   ENTRY   BOOK-KEEPING. 

The  items  posted  to  other  accounts  in  the  General  Ledger  are  as  follows 

General  Ledger. 


Debit.                                                                   1 

Mch.  I,  1889.  (Supposed  Dr.  Bal.  of  accounts  other  than  the  five  "  Ledger  accounts"),  | 

88,492 

74 

Mch.  30,  .B89. 

/   (Posted  to  Dr.  of  Cash  account), 

70,211 

15 

Mch.  30,  1889. 

/    (Posted  to  Dr.  of  Merchandise  account), 

67,928 

40 

Mch.  30,  1889. 

7>   (Posted  to  Dr.  of  Expense  and  other  accounts), 

3,400 

- 

Mch.  30,  1889. 

y    (Posted  to  Dr.  of  Bills  Rec.  account). 

6,000 

- 

Mch.  30,  ,889. 

s    (Posted  to  Dr.  of  Merchandise  account). 

5 

18 

Mch.  30,  1889. 

aa  (Posted  to  Dr.  of  Interest  account). 
Credit. 

»I5 

69 

Mch.  30,  1889. 

a    (Posted  to  Cr.  of  Merchandise  account), 

79.877 

- 

Mch.  30,  1889. 

k    (Posted  to  Cr.  of  Merchandise  account,  Interest,  etc.), 

1,645 

75 

Mch.  30, 1889. 

g    (Posted  to  Cr.  of  Cash  account). 

65,608 

81 

Mch.  30,  1889. 

«/  (Posted  to  Cr.  of  Bills  Pay.  account). 

20,410 

- 

Mch.  3c,  .889. 

ag  (Posted  to  Cr.  of  Interest  account). 

20 

99 

Mch.  30, 1889. 

Debit  Bal.  of  accounts  other  than  the  five  '  Ledger  accounts  "  in  the 

General  Ledger. 

16 

68,390 

6. 

S35-953 

235,953 

16 

Trml  Balance  of  General  Ledger,  March  30, 


A  to  G  Ledger, 

I23,"88 

18 

H  to  N  Ledger, 

85.153 

55 

0  to  Z  Ledger, 

»7,'SS 

47 

Purchase  Ledger, 

70,6=7 

36 

Private  Ledger, 

333.260 

45 

Aggrt^ate  Debit  Balance  of  the  several  other  acco 

jnts  in  the  General  Ledger, 

68,390 

6, 

403.887 

81 

403,887 

81 

The  debit  or  credit,  balance,  as  the  case  may  be,  of  each  of  the  above-men- 
tioned Ledgers,  should  agree  with  their  debit  or  credit  balances,  as  shown  by 
their  accounts  in  the  General  Ledger. 


292 


i2«»-i;{oi 

DOUBLE   F.NTRV   KOOK-K  Eli  PING. 


CHECKS. 

1299.  In  filling  out  checks  the  words  comprising  the  written  amount 
should  be  begun  at  the  extreme  left  of  the  line— so  as  to  preclude  the  possi- 
bility of  the  "raising"  of  the  check  by  the  writing  of  such  words  as,  for 
example,  "  nine  hundred  and  "  to  the  left  of  the  sum  originally  written,  and 
by  some  person  other  than  the  owner  of  the  bank  account  which  the  check 
represents. 


INDEXING. 


1300.  When  indexing  it  is  a  good  plan  to  place  such  parts  of  a  name  as 
Van,  Von,  MS  Mac,  O',  De,  and  so  on,  after  the  initials,  thus:  Horn,  J.  W. 
Van  ;  Brien,  John  O' ;  Carthy,  Wm.  M^.  The  names  will  thus  be  more  evenly 
distributed  throughout  the  Index.  A  memorandum  to  this  efTect  should  be 
made  on  the  fly-leaf  of  the  index,  or  else  a  reference  be  made  to  paragraph 
1300  of  this  book. 


EXTRA  COLUMNS  IN  CASH  HOOK. 

1301,  When  making  entries  in  the  Cash  Book  of  items  the  amounts  of 
which  are  to  be  extended  into  extra  columns,  it  is  unnecessary  to  write  the 
name  of  the  account.  Simply  write  in  the  "  Explanation  "  column  the  par- 
ticulars of  the  receipt  or  expenditure,  as  the  case  may  be,  and  extend  the 
amount  into  its  proper  column.     Thus,  for  example, 

Mdse.  Cr.  Expense  Dr. 

Sales  184.30  Set  of  Goodwin's  Blank  Books  10  00 


293 


GOODWIN'S  IMPROVED 


BILLS    RECEIVABLE, 


Cnpyrlsht.  IBM.  hy  Jj  JL  Jnedgln ._  AUtteW^ 


II.t8   KECKIVABr.E   DEBIT.  BII.I.S  KECEIVABtE  CREDIT. 


No 

Date  of 
NoKor 
Drafl. 

1880 

J_ 

Nov.   .4 

' 

Uec.     4 

8 

8 

rtENTS.  Discounts. 


LF    Maker  or  Acceptor.     Amount 


Sig.  Hugo  Smith 
Cr,  SAEmcrson.l 


Date.     |Fol.  |j 
D«-   '7  |,9°. 


tB   Amount  Vopfiri. 

]■/  500    I—     /_' 


Dec-  zo-  I  ,qg^  -   J  i  __  ! 


Frank  Richardson 


Enclewood.  Ills. 


Copyright.  18e't?J^:l°:  Ooodwln.    All  rights  re 
BIl.r,S   PAYABI.E   DEBIT. 

Payments  and  Renewals. 


^ttl' ^_ 

BILLS    PAYABLE. 

BII.I.S   PA-rAB£.E   CKEDIT. 


Wilmington.  Ills. 

Un 

onNa 

•1  Bank. 

J  Credit  Total  (in 

1  pencil.) 

1  of  Payee.    1    Where  Payable 


Favor  of  Thurber  &  C< 
Ch'iiJ.H  Gondwin.St'. 


Favor  Hall's  S.&L.  Co, 
Ch'E  Store  &  Office  Fxt 


-    .City 

pencil.)    868  |  6o'     Credit  Total  I 


The  Bills  Receivable  and  Bills  Payable  Accounts.— The  Bills  Receivable 
and  Bills  Payable  accounts  in  the  Ledger  can  be  done  away  with  by  keeping  a  Bill 
liook  of  the  form  shown  above  and  by  entering  in  it  all  note  transactions  in  a  man- 
ner similar  to  that  of  entering  cash  transactions  in  the  Cash  Book,  (See  923,  924 
and  940*.) 

Bills  Recf.ivablf.. — (2)  jVn/iS  Received. — When  a  note  is  received  we  enter  it  at 
once  in  this  book  after  the  manner  illustrated  in  number  7  above,  thereby  debiting 
Bills  Receivable;  we  then  turn  to  Bennett's  account  in  the  Ledger  and  give  him 
crt-dit  for  the  note  (see  696*) ;  after  which,  we  indicate  in  the  ledger-folio  column  ot 
this  book  the  page  of  Bennett's  account.  Thus,  Bills  Receivable  account  is  debited, 
a  complete  record  of  all  the  particulars  of  the  note  ■"  made,  and  the  date  upon 
which  it  falls  due  is  clearly  indicated  in  this  book;  ana  Bennett's  account  is  credited 
in  the  Ledger.  (3)  When  a  person  endorses  his  bills  receivable  over  to  us,  as  in 
No.  6  above,  we  write  first  the  name  of  the  maker  preceded  by  "sig"  (signature) 
294 


BILL    BOOK.     BV  J.  H.  GOODWIN. 


BILLS    RECEIVABLE. 


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BILLS   PAYABLE. 

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and  then  the  name  of  the  person  we  are  to  credit  preceded  by  "Cr."  (4)  When 
Due.— On  the  'right-hand  side  of  the  book  the  figures  under  "When  Due"  indicate 
the  days  of  the  month.  After  having  ascertained  the  date  upon  which  a  note  falls 
due,  that  is,  its  last  day  of  grace,  we  write  under  the  figure  indicating  the  Jay  of  the 
month  the  name  of  the  month  in  which  it  falls  due.  If  it  falls  due  in  a  future  year, 
-we  also  write  the  year,  as  under  "7"  above.  Now  in  order  to  ascertain  whether 
there  are  any  notes  falling  due  on  a  certain  day  it  is  only  necessary  to  glance  at  the 
column  under  that  date  and  look  for  the  month  in  which  the  note  falls  due.  For 
example:  Suppose  this  is  the  nth  of  March,  i88i  ;  we  glance  at  the  column  under 
"n"  and  there  find  Mch.  '8i  ;  following  the  line  along  to  the  left,  we  ascertain  that 
note  No.  8  is  due  to-day.  (In  the  old  form  of  Bill  Book  it  is  necessary  to  look 
through  all  the  days  of  the  month  in  order  to  learn  what  notes  fall  due  on  a  certain 
day  of  the  m.inth.)  (5)  In  the  forms  shown  above  only  three  lines  are  given 
by  way  uf  illustration,  while  in  my  regular  size  books  there  are  ten  lines  on  a  page. 

2Q5 


aiid  in  my  extra-size  books  there  are  twenty-three  lines  on  a  page.  (6)  When  a 
jage  has  been  filled  it  is  a  good  plan  to  rule  a  heavy  red  line  across  all  the  date  fig- 
ures which  have  no  entries  under  them.  In  the  foregoing  example  (Bills  Receivable) 
this  line  would  extend  across  all  the  dates  except  the  7th,  nth  and  17th.  Thus, 
when  we  see  a  canceled  date  we  know  that  its  column  is  blank.  When  a  note  is  paid, 
the  date  at  the  top  of  its  column  should  be  canceled  in  the  same  manner,  provided 
that  there  are  no  other  entries  in  the  same  column.  (7)  When  all  the  dates  on  a 
page  have  been  canceled  we  make  a  large  check  on  the  upper  right-hand  corner  of 
that  page  and  on  the  upper  left-hand  corner  of  the  opposite  page  to  indicate  that  all 
the  notes  on  the  double-folio  have  been  disposed  of  Past  Due  Notes. — (8)  When 
notes  remaining  in  our  possession  are  not  paid  or  renewed  when  due,  a  red  ink 
circle  may  be  made  around  the  "month"  in  the  "When  Due"  column  to  draw  special 
attention  to  that  fact;  or  (9)  A  portion  of  the  back  part  of  the  "Bills  Receivable" 
may  be  reserved  for  past  due  notes  and  this  line  at  once  closed  and  re-opened  in  the 
"Past  Due  Notes"  portion  of  the  book.  A  memorandum  of  the  transfer  is  then  made 
in  the  "Remarks"  column.  Payments  and  Discounts. —  (10)  When  payments  are 
received  on  our  bills  receivable  or  the  latter  are  discounted  in  our  bank,  the  entries 
for  such  are,  of  course,  made  in  the  Cash  Book,  whence  they  are  posted  direct  to 
"Bills  Receivable  Credit"  in  this  book.  (11)  We  make  a  check  under  "C"  to 
indicate  that  the  folio  given  is  that  of  the  Cash  Book;  (12)  under  "P"  to 
show  that  the  amount  credited  is  for  a  Payinent ;  (13)  under  "D"  to  show  that  the 
note  was  Discounted.  (14)  All  the  explanation  required  in  the  Cash  Book  is  simply 
the  number  of  the  note  and  whether  it  was  paid  or  discounted  ;  as,  for  example, 
"Payment  on  No.  6,"  and,  "No.  7  Disc't'd."  (15)  Five  lines  under  "Bills  Receiva- 
ble Credit"  are  allowed  to  each  note  for  payments,  etc.  When  a  note  is  not  paid  in 
full  in  the  fifth  payment,  the  balance  due  on  it  may  be  transferred  to  a  new  line  and 
a  new  No.  given  to  the  note — the  new  No.  being  given  in  the  "Remarks"  column  on 
the  old  line  and  the  old  No.  in  the  "Remarks"  column  on  the  new  line.    Renewals. — 

(16)  When  notes  are  renewed  we  enter  the  new  note  on  a  new  line  and  write  on  this 

line  "Cr.  No "  (here  give  the  old  No.);  then  in  the  "Folio"  column  of  the 

old  line  we  write  the  neiv  No.,  make  a  check  under  "B"  to  show  tliat  the  figures 
under  "Folio"  indicate  the  note  number  in  the  Bill  Book  under  which  the  note  is 
renewed,  and  make  a  check  under  "R"  to  indicate  that  the  note  has  been  renewed. 

(17)  Whenever  there  is  a  complicated  entry  requiring  considerable  explanation,  like, 
for  instance,  that  in  421  to  425*,  it  is  better  to  make  a  Journal  entry  and  post  to  the 
Bill  Book,  writing  on  the  latter  the  Journal  folio  and  making  a  check  under  "J." 

(18)  In  Full. — When  a  note  is  paid  in  full,  discounted,  or  renewed,  we  make  a  large 
check  in  the  "In  Full"  column  :  then  the  blank  spaces  in  this  column  indicate  that 
the  notes  on  those  lines  are  not  so  disposed  of  Trial  Balance. —  (19)  We  find  the 
balance  of  each  page  separately  and  carry  it  to  the  trial-balance,  unless  the  latter  be 
a  trial-balance  with  the  names  of  the  accounts.  (20)  In  the  latter  case  we  make  a 
summary  of  the  balances  on  the  several  pages  and  enter  the  aggregate  in  the  trial- 
balance.  (21)  The  object  in  having  the  alternate  lines  in  different  colors  is  to  guide 
the  eye  along  the  line  or  down  the  column. 

Bills  Payable.— (22)  The  Bills  Payable  part  of  this  book  is  kept  upon  precisely 
the  same  method  as  the  Bills  Receivable  part.  (23)  When  we  wish  to  charge  an 
account  other  than  that  of  the  person  in  whose  favor  the  note  is  made  payable,  we 
make  the  entry  in  this  book  in  the  manner  shown  on  the  line  after  No.  2  on  the  pre- 
ceding page.     (See  942*-)  < 

Collection  ok  Remittance. —  (24)  When  any.  bill  receivable  has  to  be  sent 
out  of  the  city  for  collection,  or  any  bill  payable  has  to  be  paid  in  a  distant  city,  we 
write  the  month  under  the  date  when  we  should  in  the  former  case  send  the  note 
for  collection  or  in  the  latter  case  remit  for  our  note,  and  simply  make  a  check 
under  the  date  when  the  note  falls  due. 

296 


Monthly  Bill  Book.— (25)  This  book  can  be  used  as  a  Monthly  Bill  Book  by 
simply  writing  the  month  and  year  in  the  upper  right  and  left-hand  corners  of  the 
pages,  by  reserving  a  certain  page  or  certain  pages  for  each  month  of  the  year,  and 
by  entering  those  notes  which  fall  due  in  certain  months  on  their  respective  pages. 
When  this  is  done  it  is  only  necessary  to  make  a  check  in  the  column  under  the 
date  on  which  a  note  falls  due  instead  of  writing  therein  the  name  of  the  month  in 
which  it  falls  due.  (26)  When  this  method  is  adopted,  the  notes  must  be  numbered 
according  to  the  pages  upon  which  they  are  entered,  and  not  in  the  order  in  which 
they  are  received  or  given.  For  example,  suppose  pages  i  and  2  are  reserved  for 
December,  '80,  and  pages  3  and  4  for  January,  '8i,  and  the  first  two  notes  we  receive 
are  from  Ed.  Russell.  One  falls  due  in  December,  is  entered  on  page  i,  and  is  num- 
bered II  ;  the  other  falls  due  in  January,  is  entered  on  page  3,  and  is  numbered  31. 
The  first  figure  in  this  number  [31J  indicates  the  page  [3J,  and  the  second  figure  [i], 
the  number  of  the  line  on  that  page  upon  which  the  note  is  entered,  the  first. 
Since  there  are  ten  lines  on  a  page,  in  order  to  keep  up  this  method  of  numbering, 
the  tenth  line  must  be  numbered  "x."  For  example,  the  note  entered  on  the  tenth 
line  of  page  3  will  be  numbered  "3X." 

Saving  of  L.\bor. — (27)  The  saving  of  labor  which  is  effected  by  the  use  of  this 
book  is  as  follows:  The  writing  of  the  words  "Bills  Receivable  Dr.  to"  for  every 
bills  receivable  entry;  of  the  entire  debit  side  of  the  Bills  Receivable  account;  of 
the  "Explanation"  column  on  the  credit  side  of  the  Bills  Receivable  account;  of  the 
words  "Dr.  to  Bills  Payable"  for  every  bills  payable  entry;  of  the  entire  credit  side  of 
the  Bills  Payable  account;  of  the  "Explanation"  column  on  the  debit  side  of  the 
Bills  Payable  account ;  and  of  the  name,  date  and  time  in  every  entry  that  is 
made  in  the  Cash  Book, —  all  this  writing  is  avoided.  The  full  extent  of  this  sav- 
ing of  labor  cannot  be  appreciated  until  this  Bill  Book  is  used. 

Transfer  from  the  Ledger. —  (28)  In  order  to  transfer  the  Bills  Receiva- 
ble and  Bills  Payable  accounts  from  the  Ledger  to  this  Bill  Book,  it  is  not  necessary 
to  wait  until  the  end  of  the  year,  or  even  until  the  end  of  the  mont/i,  for  those 
accounts  may  be  closed  at  once  and  only  the  entries  for  the  unpaid  notes  transferred 
to  this  book. 

(29)  For  examples  of  the  illustrations  in  this  book,  see  369,  116,  493,  373,  113, 
495,388,  115;  362,  531,  381,  133,  391,  and  543* 

Accounts  Receivable  and  Accounts  Payable.— (30)  An  extra  copy  of  this 
book  can  be  used  for  the  purpose  of  showing  when  certain  invoices  for  which  we 
wish  our  customers  to  settle  promptly  (goods  sold),  or  for  which  we  wish  to  settle 
promptly  (goods  bought)  fall  due. 

SIZES    AND    PRICES. 


SIZE  No.  I.— Regular  (lo  lines  to  a  page)  ;  28  inches 
across  both  pages,  Z\i  inches  long ;  bound  in  paper 
sides  and  leather  back  ;  "  Scotch  Linen  "  18-Ib.  paper  ; 
Bills  Receivable,  270  lines;  Bills  Payable,  70  lines  :  by 
express,  $1.70  ;  by  mail,  $1.85. 

SIZE  No.  2.— Regular,  same  as  size  No.  i  except  the  fol- 
lowing :  Bills  Receivable,  540  lines  ;  Bills  Payable,  140 
lines:  by  express,  $2.40  ;  by  mail,  $2.65. 

SIZE  No.  3.— Regular,  same  as  size  No.  i  except  the  fol- 
lowing :  Bound  in  cloth  sides  and  leather  back  ;  Bills 
Receivable,  io«o  lines;  Bills  Payable,  280  lines:  by 
express,  $3.40  (too  heavy  to  be  sent  by  mail). 


SPECIAL  PROPORTIONS.— Persons  desiring  their 
Bills  Receivable  and  Bills  Payable  apportioned  other, 
wise  than  above,  can  have  them  as  desired  by  sending 
35  cents  extra. 

When  books  are  sent  by  express  the  charges  are  not  pre- 
paid :  when  sent  by  mail,  they  are  not  registered  un- 
less eight  cents  extra  have  been  sent  for  that  purpose. 
Any  of  the  above  sizes  will  be  sent  upon  receipt  ol 


t  upon  application. 


Copyright,  1887,  by 
agraph  numbers  in  "Goodwin 


H.  Goodwin.     All  rights  t 
Improved  Book-Keeping  : 


Address  Orders  (accompanied  by  cash)  to 


J.  H.  GOODWIN,  1215  Broadway,  New  York. 
297 


1 


Goodwin's  *  * 
Good   tbitigs  , 

BEING  A  CATALOGUE  OF 


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Useful  Jlrficles  for  Office  men! 

Discounts  quoted  below  are  available  only  to  those  who  possess  this  work,  entitled 
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NOTEl  Every  article  herein  advertised  is  personally  gaaranteed  by  the  author  of  the 
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''Goodwin's  Good  Cbitigs. 

59-  Goodwin's  Practical  Instruction  for  Business  Men,"  a  72-page  pamphlet,  size  6x9  inches. 
20th  edition  (published,  1902),  58,000  copies  sold— containing  the  following: 

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FEIT Money  ;  so  complete  that,  after  having  read  the  article  thoroughly,  spurious  notes  may 
be  detected  at  sight.     Experts  charge  $10.00  for  instruction  not  so  complete  and 

THOROUGH  AS  THIS! 

Qearing  Houses — Fully  explaining  the  management  and  operation  of  Clearing  Houses  in 
the  larger  cities.     An  interesting  subject  of  which  very  few  business  men  know  anything. 

Business  Law  for  Business  Men— Treating  thoroughly  the  following  important  subjects,  viz.: 
The  Law  of  Contracts,  Bills  of  Exchange,  Promissory  Notes  and  Checks,  The  Law  of  Partner, 
ship,  Limitations,  Carriage  of  Goods,  Receipts  and  Releases. 

Exchange — How  to  save  Money  in  Exchange  when  your  banker  charges  Exchange  on 
the  drafts  you  buy  of  him.     An  article  that  your  banker  would  gladly  pay  you  not  to  read. 

The  Secret  of  Success  in  Business— Giving  valuable  hints  in  regard  to  How  TO  MAKE  AND 
Save  MONEV-and  Many  Other  Equally  Valuable  ArUcles.     Price,  $1.     50  per  cent. 

60.  "Keister's  Corporation  Accounting  and  Auditin?,"  537  pages,  6x9  inches,  bound  in 
leather,  consisting  of  35  "Lessons,"  covering  the  following,  among  many  other  subjects: 
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61 .  "  Ringo's  Management  of  Private  Corporations,"  206  pages,  6x8  inches,  bound  in  cloth 
(published,  1902),  revised  and  enlarged,  containing  the  following:  A  Corporation  a  Legal 
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holder's Liability  under  Defective  Corporate  Organization  ;  A  Subscribing  Stockholder  not 
bound  until  all  Stock  has  been  Taken;  Payment  of  Stock  Subscribed  either  in  Money  or 
Property  and  Liability  of  Subscribing  Stockholders;  Changing  a  Private  Business  to  a  Cor- 
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63.  "The  American  Business  and  Accounting  Encyclopedia,"  9  x  II  inches,  109O  pages, 
handsomely  bound  in  dark  red  leather  with  gold  embossing  andgold  top,  printed  on  hne 
paper,  weighs  about  fifteen  pounds  and  contains  innumerable  articles  upon  all  subjects  of 
interest  to  progressive  book-keepers  and  successful  business  men.  Space  forbids  further 
reference  to  contents  of  this  great  work  than  simply  a  few  hints,  which  follow:  Special 
Systems  for  more  than  eighty  Different  Kinds  of  Business,  with  Eight  Hundred  Illustrations 
of  Forms,  including  "Loose  Leaf"  and  "Card"  Records;  also,  Accountants' Association; 
Certified  Public  Accountants;  Accountants' Investigations;  Addition;  Adjustment  Account; 
Adventure;  Advertising;  Agreements;  Annuities;  Arithmetic;  Articles  ot  Incorporation; 
Articles  of  Co-Partnership;  Assessment;  Assignments;  Auditing;  Averaging  Accounts; 
Balance  Sheet;  Bank  Accounting;  Bank  Examination;  Boot  and  Shoe  Accounting;  Branch 
Business  Accounting;  Brewery  Accounting;  Brokerage;  Building  Society  Accounting; 
Capital;  Card  Ledgers;  Cash  and  Bank  Accounts;  Check  Systems;  City  Accounting;  Classi- 
fication of  Accounts;  Clearing  House;  Clothing  Business;  Coal  Business;  Collection  Regis- 
ters; Coinmon  Carriers;  Consideration;  Consignment  Accounts;  Consolidations;  Contracts; 
Corporation  Accounting;  Correspondence  Register;  Costs,  factory  and  manufacturing; 
Creamery  Business;  Customers' Lists;  Custom  House  Accounting;  Daily  Statement;  Deben- 
tures; Deficiency  Statement;  Department  Cards,  Sheets,  Statements,  Accounts  and  Books; 
Depreciation;  Detection  of  Errors;  Discount;  Dividends;  Drug  Business;  Economy; 
Electric  Lii^ht  Company  Accounting;  Estimated  Profits;  Executorship  Accounts;  Fire 
Insurance  Accounting  and  Adjustment;  Fish  Business;  Flour  Mill;  Foreign  Exchange; 
Foundry  and  Machine  Shop;  Fruit  Growers;  Gas  Company  Accounting;  Good  Will;  Grain 
Business;  Grain  Elevator;  Grocery  Business;  Hardware  Business;  Hospital;  Hotel;  Ice 
Company  Accounting;  Income  and  Expenditure  Statements;  Indexing;  Indorsement;  Install- 
ment Business  Accounting;  Institution  Accounting;  Insurance  Agents' Accounting;  Interest; 
Inventory;  Jobbing  Business;  Library  Accounting;  Life  Insurance,  with  Cash  Journal  Acci- 
dent Insurance  Debit  and  Credit  form,  also  Combined  Cash  Journal  and  General  Ledger 
Receipts  and  Disbursements  form,  each  form  10  x  33  inches;  Livery  Business;  Loose 
Leaf  System;  Lumber  Business;  Mail  Order  Business;  Manufacturing  Accounts;  Mining 
Company  Accounting;  Monthly  Statement;  Municipal  Accounting,  with  Expenses  form 
10x32  inches;  Fund  Book,  Receipts  and  Disbursements  form  10x32  inches,  and  form  for 
Specification  of  Municipal  Balance  Sheet;  Newspaper  Business;  Audit  Note  Book;  Oil 
Company  Accounting;  Order  Blank  Svstem;  Paper  Manufacturers' Accounting;  Partnership 
Account'ing;  Pay  Roll;  Personal  Accounting;  Physicians'  Accounting;  Pledge;  Plumbers- 
Accounting;  Printing  Business;  Trial  Balance,  Trading  Account,  Proht  and  Loss,  and 
Balance  Sheet  Statement;  Protest;  Publishers'  Accounting;  Purchase  Record;  Real  Estate 
Accounting;  Retail  Store  Accounting;  Reverse  Posting;  Savings  Bank  Accounting;  Saw 
Mill  Accounting;  School  Accounting;  Self-Proving  Ledgers.  Boston  Bank  and  Mercantile 
Balance;  Ship  Accounting;  Single  Entry  Balance  Sheet;  Sinking  Fund;  Societies  Account- 
ino-;  Comparative  Financial  Statement;  Statistical  Records;  Steam  Railroad  Accounting; 
Stock  Records;  Suspense  Ledger;  Doubtful  Account  Ledger;  Tools  and  Supplies;  Trade 
Inquiry  form;  Trading  Account;  Traveling  Salesmen's  Accounts;  Trial  Balance,  detection 
of  errors;  Trust  Company  Accounting;  Usury;  Voucher  System,  with  "  Register  of 
Vouchers"  and  "Disbursements"  forms,  each  10x32  inches;  Table  of  Wages;  Water- 
works Accounting,  with  Water  Account  form  10  x  27  inches;  Working  Capital;  and 
Workroom  Accounting.  All  the  foregoing  are  extended  articles.  The  shorter  articles 
many  of  them  extremely  important,  are  not  mentioned.  To  give  an  idea  of  the  number  ot 
these  articles  it  may  be  stated  that  this  work  requires  an  Index  Column  24  feet  long  in  which 
to  fully  state  its  contents.   $10.     20  per  cent. 

299 


64.  "Loos^-Uaf  and  Card  Systems."  Send  two  2-cent  stamps  for  Catalogue  with  prices. 
10  per  cent.  oH  Catalogue  Prices  on  Card  Sy^ms,  and  ^'A  per  cent,  off  on  Loose-Leaf  Systems. 
'  65a.  "Science  of  Loose-Lcaf  Book-keeping  and  Accounting,"  by  Charles  A.  Sweetland. 
238  pages  of  instructive  matter  in  regard  to  the  advantages  of  Loose-Leaf  Accounting  Systems, 
Loose-Leaf  Ledgers,  Vouclier  Systems,  Cash  BoolsS  and  Journals  ;  also  various  lorms  for 
Banking  and  Trust  Companies,  Stock  Brokers,  Wholesale  Houses,  Manufacturing  Plants, 
Transportation  Companies,  Municipal  Work,  Bill  and  Charge  Systems,  together  with 
about  50  cuts  of  Loose-Leaf  Forms  for  various  other  purposes.     $2.       JO  per  cent. 

65b.  "American  Accountants' Manual,"  by  Frank  Breaker,  C.P.A.  210  pages,  contain- 
ing Examination  Questions  prepared  by  the  State  Board  ot  Examiners  appointed  by  the 
Board  of  Regents.logether  with  Answers  to  the  Questions;  Theory  of  Accounts;  Practical 
Accounting;  Auditing;  Commercial  Law;  Balance  Sheets;  Statements  of  Affairs;  Trading  and 
Profit  and'Loss  Accounts,  and  Scope  of  Accounting.     $3.      JO  per  cent. 

65c.  "Business  Law  and  Forms,"  by  Judge  Hugh  M.  Spalding.  702  pages.  15,000 
Law  Points  Answered  in  Alphabetical  Order.     Cloth,  $3  ;    sheep,  $3.75-     10  per  cent. 

66.  "The  Voucher  System,"  a  pamphlet,  28  pages,  6x9  inches.     $1.      JO  percent. 

67.  "The  Packard  Commercial  Arithmetic,"  6x8'^  inches,  cloth  bound,  360  pages. 
admirably  adapted  to  selt-instruction  in  business  arithmetic.     $1.50.       JO  per  cent. 

6S.  "Brown's  Business  Correspondence  and  Manual  of  Dictation,"  5x7  inches,  364  pages, 
cloth  bound,  containing  the  following:  Business  Letters  upon  Advertising;  Banking; 
Brokerage;  Financial;  Grain;  Insurance;  Railroad;  Manufacturing  and  Mercantile  Business; 
also  miscellaneous,  such  as  Application  for  Employment;  Certificate  of  Recommendation; 
Letter  of  Introduction;  Collection  of  Bad  Debts,  etc.;  Law  Forms  and  Court  Work;  Advice 
to  Students  of  Shorthand  and  Typewriting;  Punctuation;  Use  of  Capital  Letters;  Proper 
Forms  of  Address;  Abbreviations  Used  in  Writing  and  Printing;  Quotations  from  Latin, 
Greek,  French,  German,  Italian  and  Spanish  Languages;  Literary  Selections;  and  an 
extended  Spelling  List.     $1.     JO  per  cent. 

69.  "Packard's  Bank  Book-keeping,"  88  pages;  cloth  bound;  covering  the  following 
subjects:  Banks  and  Their  Management;  Second  Teller;  First  Teller;  Discount  Clerk; 
Collection  Clerk;  Third  Teller;  General  Book-keeper;  Clearing  Houses;  Computation  of 
Reserve-  Analysis  of  Bank  Statements;  Organization  of  National  and  State  Banks;  Letters 
of  Credit;  Demand  Loans;  Kinds  of  United  States  Money;  Bank  Examinations  and  Basis  ot 
Loans.     $1.25.     (0  percent. 

70.  "  The  Expert  Calculator."  This  is  a  book  not  intended  to  teach  the  ordinary 
methods  of  Arithmetic  which  can  be  obtained  from  school  books,  but  to  give  short  processes 
of  obtaining  results— to  give  rules  for  work  not  usually  found  in  Arithmetics,  and  to  give 
some  work  given  in  Arithmetics,  but  not  fully  explained— to  which  are  added  some  diver- 
sions with  numbers,  puzzling  questions  relating  to  them,  etc.  128  pages;  bound  in  leather 
and  indexed.     50c.     JO  per  cent. 

71.  "Carney's  Secretary's  Manual,"  containing  the  following:  Forms,  Instructions  and 
Legal  Information  for  Secretaries  of  corporations;  Judicial  Decisions  upon  duties  and  liabili- 
ties of  Stockholders,  Directors,  Officers  and  Agents;  Ratifications;  Articles  of  Incorporation; 
By-Laws;  Stock  and  Stockholders;  Corporate  Instruments;  Corporate  Meetings;  Corporate 
Books  and  Records;  Resolutions;  Certificates;  Notices;  Powers  of  Attorney;  Petitions;  Rules 
of  Order.     Size,  S'A  ^7'4  inches;  221  pages;  cloth  bound;  $2.     JO  per  cent. 

72.  Eaton's  "How  to  do  Business,"  6 x8>^  inches,  432  pages,  linen  bound,  covering  the 
foUowino-:  Banking;  Note  Brokers;  Exchange;  Stocks;  Bonds;  Trusts;  Transportation; 
Insurance;  Importing;  Exporting;  Warehousing;  Correspondence;  Grammar;  Telegraphy; 
Employment;  Short  Cuts  in  Figures;  Mechanics'  Arithmetic;  Margin  1  rading;  Modern 
Book-keeping;  Business  Dictionary;  Abbreviations;  Mercantile  Arithmetic  and  Business 
Geography;    with  numerous  illustrations.     $2.     JO  per  cent. 

73  "The  Locke  Adder."  Capacitv,  999,999.999;  Fastest,  simplest,  handiest,  most 
practical  and  durable,  low-pnced  calculating  machine.  Adds.  Subtracts,  Multiplies.  Divides, 
without  mental  labor  or  error.     $5.      JO  per  cent. 

74  "The  FoUett  Numbering  Machine."  It  numbers  from  i  to  999.999.  consecutively,  ir. 
duplicate,  triplicate,  or  it  repeats.  No  rubber  used;  steel  composition  figures;  self-inking; 
used  by  U.  S.  Government.     $5.      JO  per  cent 

75.  "Manufacturers'  Accounts,"  by  Ed.lis  &  Tindall,  Canadian  Accountants  6x8;.' 
inches;  cloth;  181  pages.  Cost  of  production  shown,  with  minimum  amount  of  book-keeping; 
70  pages  of  illustrations.     $3.     JO  per  cent. 

300 


76.  "Giving  and  Getting  Credit,"  by  Frederick  B.  Goddard,  5  xy^^  inches,  linen  bound. 
217  pages.  On  credit  management;  failures  and  clianges  in  business  conditions;  suggestions 
and  precautions;  laws,  etc.     $1.     lOpercent. 

77.  "The  Book-keeper,"  a  monthly  magazine  for  book-keepers  and  students  in  book- 
keeping; also  treats  on  stenography,  arithmetic,  expert  accountancy,  card  system,  loose  leal 
ledgers,  voucher  system.     $1  a  year.     lOpercent. 

78.  "Ropp's  Commercial  Calculator."  A  ready  calculator,  business  arithmetic  and 
account-book  combined.  The  standard  for  thirty  years:  500,000  copies  sold.  It  contains 
nearly  all  the  Sliort-Cuts  known;  hundreds  of  simple  rules  and  original  methods  for 
easy  and  rapid  calculation,  showing  at  a  glance,  without  the  use  of  pencil,  pen  or  paper, 
much  desirable  information  along  the  line  of  Figures.  Neatly  printed  and  elegantly 
bound,  in  morocco.     $1.     lOpercent. 

79.  MacFadden's  "How  Success  is  Won,"  250  pages,  cloth  bound,  containing  the  following: 
Primary  Essentials  of  Success;  True  Dignity  of  Labor;  Persistence,  Determination,  Integrity, 
Concentration,  Self-contidence,  Education,  Experience,  Reasoning;  Machine-made  Intellects; 
Mental  Slavery;  Sharp  Men;  Overwork;  Clock-watchers;  Recreation;  Personal  Appearance. 
$1.      lOpercent. 

80.  Cody's  "Art  of  Writing  and  Speaking  the  English  Language."  In  4  volumes,  namely— 
Word-study,  Grammar,  Composition,  Constructive  Rhetoric,  the  set  in  a  box,  containing  the 
following:  Business  Letter  Writing,  Short  Story  Writing,  Creative  Composition,  and  the  Surest 
and  Quickest  Way  of  Getting  the  Knack  of  Using  Words  Effectively;  How  to  Spell  and 
Pronounce  Words;  Grammar  Simplified.     Regular  price,  $3.     Net,  $1.80. 

81.  Hawkins'  "New  Catechism  of  Business,"  7°°  pages,  cloth  bound,  containing:  Business 
Forms;  Things  Personal;  Good  Health;  Business  Qualifications;  Customs  of  Trade;  Business 
Practice;  Accounts  and  Book-keeping;  Useful  Book-keeping  Forms;  Use  of  Telephone  and 
Telegraph;  Stenography  and  Typewriting;  Applied  Grammar;  Commercial  Law;  Banking; 
Computing  Interest;  Notes;  Law  Definitions;  Business  Definitions;  Tables  of  Measures  and 
Weights;  "  Short  Cuts  "  in  Figures;  Monies  of  the  World;  Coins;  Civil  Service  Examinations- 
Historical  D.ita.     $1.     lOpercent. 

Uflgalth  41appin«ss  Success  ij 

82.  The  Goodwin  Useful  Information  Sheet,  a  pamphlet  of  24  pages,  covering,  "  in  a 
nutshell,"  the  following:  Why  many  applicants  for  a  position  fail  to  get  it,  with  valuable 
suggestions  as  to  how 'to  succeed  ;  methods  of  the  "  captains  of  industry;  "  wit  and  logic  of 
great.authors,  past  and  present;  also,  humorous  stories.  I  PAY  FIVE  DOLLARS,  to  the 
first  submitter,  FOR  EVERY  HUMOROUS  .STORY  (original  or  with  credited  source)  I 
PRINT— in  my  little  journal  entitled  "  The  Nutshell,"  published  (quarterly,  at  ten  cents  a 
year.  The  submitter,  however,  must  possess  a  copy  of  this  "  Uselul  Information  Sheet," 
when  he  may  submit  as  many  stories  as  he  likes.  This  "  Sheet "  contains  one  of  these  five- 
dollar  humorous  stories  and,  in  addition  to  the  above  valuable  articles,  terse  information 
upon  short  calculation  and  business  arithmetic,  business  management,  character  reading  and 
various  other  subjects  of  great  interest  to  all  mankind  ;  also,  how^  to  acquire  a  good  circu- 
lation, a  cheerful  disposition,  a  clean  body,  a  clear  brain,  an  aptitude  for  business,  a  good 
appetite,  sleepful  nights,  a  light  heart,  a  nimble  footstep,  a  vigorous  constitution,  success  in 
business  and  contentment  in  general.  PRICE,  postpaid,  25  CENTS.  You  will  preserve 
this  little  pamphlet  and  treasure  it  as  a  classic,  if  you  will  order  it.  Send  for  it  and  you  may 
have  your  monev  back  if  vou  do  not  consider  the  information  worth  at  least  ONE  HUN- 
DRED TIMES  THE  PRICE  OF  THE  PAMPHLET  !  Get  up  a  club  ol  four,  send  on  one 
dollar,  and  I  will  send  an  extra  copy  of  the  pamphlet  FREE,  for  yourself. 


NOTE. 

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10  per  cent,  off  regular  price,  if  you  will  give  name  and  address  of  publisher.  I  prepay 
transportation  on  all  the  foregoing  except  Nos.  63  and  64.     Cash  must  accompany  order. 

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